OREGON STATE BOARD OF HIGHER EDUCATION
MINUTES OF REGULAR MEETING
CENTRAL OREGON COMMUNITY COLLEGE -- LIBRARY, LOWER LEVEL
BEND, OREGON


July 16-17, 1998

ROLL CALL

The meeting of the State Board of Higher Education was called to order at 11 a.m. by President Imeson.

On roll call, the following answered present:

Dr. Herb Aschkenasy
Ms. Diane Christopher
Mr. David Koch
Mr. Jim Lussier
Ms. Gail McAllister
Ms. Katie Van Patten
Mr. Jim Willis
Ms. Phyllis Wustenberg
Mr. Tom Imeson

Absent: Ms. Esther Puentes (arrived at 12:30 p.m.) and Dr. Jim Whittaker (business conflict).

MINUTES APPROVED

The Board dispensed with the reading of the June 19, 1998 minutes. Ms. McAllister moved and Mr. Willis seconded the motion to approve the minutes as submitted. The following voted in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Van Patten, Willis, Wustenberg, and Aschkenasy. Those voting no: none.

PRESIDENT'S REPORT

Thanks

Mr. Imeson observed that the Board meeting was being held in a new setting -- the campus of a community college. He thanked Dr. Bob Barber, President of Central Oregon Community College (COCC) and his staff for encouraging the Board to meet on his campus and for all of the arrangements. "Later in the day, we will be meeting with the Board of COCC. And, this morning, the Governor will be joining us. We have a lot of important business to consider today."

Mr. Imeson thanked Chancellor Cox and his staff and institution presidents for the work they had done in preparing the reports of the Committee on Budget and Finance and Governance and Structure. "At our last meeting, we did the eulogies for departing Board members. We really didn't recognize Herb Aschkenasy for his work as President of the Board over the past two years. He has provided outstanding leadership for us and took us through some important times. Herb's name is attached to performance measures, a subject on which he has been relentless. We appreciate that."

Chancellor's Salary

President Imeson called attention to the minutes of the Executive Committee Meeting of June 18, 1998. At that meeting, the Executive Committee agreed to a merit salary increase for the Chancellor to be awarded in a three percent split: the first in September of 1998 and the second in February 1999. Additionally, the Committee agreed that beginning next year, increases in compensation for the Chancellor would be based on performance, following new procedures for goal setting and evaluation. "During the business part of the meeting, I will be asking for a motion to approve this increase and to base future salary increases on performance," Mr. Imeson concluded.

CHANCELLOR'S REPORT

Presidents' Salaries

Chancellor Cox indicated that, "Following President Imeson's comments on executive salaries, I will likewise recommend to the Board that the presidents receive a similar three percent increase in September plus three percent in February 1999. We made a commitment at the Executive Committee level to move to a more structured evaluative process. In the next year, the presidents and I will set goals and you will hold us accountable to those goals and salary increases, if any, will be based on how well we do."

Kudos

The Chancellor complimented Vice Chancellors Shirley Clark and Bob Dryden and all of those who brought the Master of Software Engineering from the release of the money in December to courses being taught in April and program approval occurring on two of the institutions this month. "That is great speed for higher education in a very difficult area involving three public universities and one private institution," the Chancellor observed.

Secondly, the Chancellor extended kudos to President Bernstine who "just continues to rake them up in his first year as president. First, he got the President of the United States to come speak at commencement and now he lands a major Korean government initiative that will open another window on the Pacific Rim," Dr. Cox pointed out.

IFS Report

Following is an excerpt from IFS President Kemble Yates' remarks:

"The IFS has not met since I last reported to you, and no new burning issues that I am aware of have surfaced. Also, you have a history-making agenda before you and I know you'll need time to digest and reflect upon the changes you are contemplating. I did have an opportunity to read through the Board Committee minutes, the Board agenda for today, and the proposed 1999-2001 Biennial Budget Request. By and large, I am very encouraged with both the substance and the tone of these documents. In my past reports, I have raised issues with you regarding student tuition, faculty compensation, and performance indicators. I believe the Committee recommendations before you today truly reflect both the Board and the Chancellor's Office having considered concerns raised by IFS.

"The budget request makes clear OUS' commitment to holding the line on undergraduate tuition as a vital step to maintain and increase access to higher education. The document also speaks to the need to improve our faculty's compensation level relative to national comparitors. And the way these points are raised in the rationale statements for the base budget build-up put the right emphasis on these goals: tuition is related to access and faculty compensation is related to quality. So my main message today to you all is: thank you for listening to us!

"As we all know, today marks the beginning of a long journey to implement the proposed changes. We need to sell our new budgeting strategy to the Governor, the legislature, and the Department of Administrative Services (DAS). We need to flesh out the remaining details in the two Committees' proposals. We need to complete both the System and campus performance indicator methods. We also need to prepare for contingencies: what if we aren't fully funded? What will our priorities be? What if the System works well for several campuses, but creates crises for others? How will changes be made, if at all?

"I realize no one has ready answers to these questions, but as we enter the political phase of our proposed changes, we must prepare for a variety of outcomes. I will work with you, faculty, staff, and students to help bring these changes to fruition. There is no question in my mind that a more adequately and transparently funded System will create a win-win-win situation: we as employees can better do our job of delivering education, students can better afford that education, and Oregon can better position itself to have a prosperous economy and rich quality of life for its citizens."

GOVERNOR KITZHABER

Following are the Governor's remarks:

"I appreciate the opportunity to come by today and I want to talk to you about the recommendations that will be brought to the Board at your meeting. As you recall, when we've talked on previous occasions, it is one of my objectives to do all that I can to ensure that we move the state toward providing the opportunity for a collegiate experience for anyone in Oregon who needs one and, indeed, wants one. I think, just to draw a parallel, when I got into politics back in 1978 in Roseburg, kids could drop out of Roseburg High School in 10th or 11th grade and get a good paying job in the mill or the woods, with good benefits and the expectation that they would have that job and those benefits for the rest of their life.

"Clearly, those days are gone forever. Today, the relationship between social and economic success are more closely tied to postsecondary education than ever before. And people will change jobs three or four times during the course of their lives; this makes postsecondary education and re-training a real imperative. If you go back to the end of World War II, when postsecondary education wasn't necessary to be successful economically or socially in this country, we had the wisdom to pass the GI Bill, which I think is probably one of the most important social programs of this century and allowed several generations of Americans to help themselves up and improve themselves and has been a tremendously important tool.

"If you compare that to today, when there is a clear relationship between postsecondary education and success, the average Oregon student who graduates from a public university now carries an average $17,000-$20,000 debt burden. So on the one hand, in 1998, the private sector, as well as many people in public life, are talking about the importance of education and lifelong learning, and by our actions we are creating enormous barriers, both financial and geographic, for us to achieve that.

"My charge to you back in December was to try to address that issue and there were two parts to it. First was to provide greater flexibility for individual institutions to meet the demands of both the students and the economic marketplace, by which I mean, the needs of the business community for workers and needs of students to be able to pick the courses they need to pursue a variety of educational opportunities.

"Second was to develop a new budget model that had the dollars follow the student and that creates the framework for more explicit and accountable fiscal choices for the System of higher education. I'd like to comment on those today; I've had the opportunity to see the preliminary drafts. Let me compliment you on these. Both of the subcommittees have done an exemplary job of trying to meet that charge.

"The OUS finance restructuring is excellent and I strongly support the recommendations that are in that report. The dollars following the student, I think, is done in a very clear way with the tuition and fees staying on the individual campuses and then allocating the resources from the state based on a formula that reflects the level of the student in the System and, indeed, the course work they are taking. I think your use of national data to develop those and putting them right in the middle, makes them very defensible from a political standpoint as well as a policy standpoint. The remaining state funds, as you know, are in a lump sum pool to serve as incentives and challenges for the individual campuses to conduct their business and offer new programs. I'm very delighted with the way that you've laid that out.

"Breaking out statewide public services like, for example, the ag experiment stations; regional access in which you have the line item for support of institutions, EOU, for example; and various incentives and targeted resources for Board initiatives as well as some resources for the Chancellor. The real value is that it gives us the opportunity to explain what these investments are for and gives people the opportunity to judge them against other possible uses of those resources. And that was something that was very, very difficult to do before. It will make your life easier and it will make your life more difficult because of the explicit nature of the choices that will be laid before you. I want to return to that in a minute when I talk about the state financial picture we're marching into.

"The second area is the governance restructuring, which I also think is very commendable. I am particularly pleased with the effort in pursuit of a seamless process between our two- and four-year institutions, which is very clearly consistent with principle six of our College Access Task Force, the seamlessness principle. Developing measurable outcomes and reviews for both the Chancellor's performance and the presidents' performance is very welcome. The direction for the Chancellor to try to strengthen relationships among other educational sectors is, also, long overdue. I think that we need to begin to view our community colleges, our independent colleges and universities, and OUS, as part of a common postsecondary capacity that we need to make use of to advance the educational objectives of the state. Also changing the Internal Management Directives (IMDs) is going to support the presidents in making those kinds of internal changes that shift their agendas from ones that serve primarily the institution to ones that serve the broader interests of the state at large.

"Let me take just a moment on the third element of the Governance Report -- the Advisory Committees. I appreciate there has been some division on that and some debate. I want to put on the table my view, and I have given this a lot of thought. In balance, I think it's a good idea. I think that having these boards does a number of things: it does, in fact, give you some broader advocacy for the institutions in the System. It can provide support for the president and cover for the president in dealing with some of the difficult issues that will be inherent in trying to move those institutions in that direction. And, it will also allow the Board of Higher Education to off-load a number of functions that you do right now that I think are inconsistent with the new role of being sort of a premier policy making body for the state. Clearly, the accountability for their performance needs to flow back to the Board of Higher Education. But, I think that it would be worth exploring; and whether you do that for all entities or take two or three that are interested and do it on a trial basis, I think that it is something that merits some real consideration.

"I'll speak for just a moment about the other side of this, which is a little outside the purview of the report, but I think that it is equally important and that is the effort both to increase capacity and reduce the barriers to access. There are three proposals that you have probably seen that came, in part, from the Independent College Association, but I think has some broad currency. One is the increased need for Need Grants. I think that the Student Association is very interested in that and the independent colleges are, as well. The other one that I think is very important in achieving better financial access are the Achievement Grants. That is essentially a proposal that would grant to a high school student who achieves a certificate of initial mastery resources to attend a postsecondary institution. I think it is a tremendous connection in its setting and message for our postsecondary system. The third one is, I guess, less of a financial access issue as it is a capacity issue; what I call Progress Grants, which are incentives for getting a community college student to enroll in a four-year institution. To the extent that you can blur those lines and encourage some students to get their first two years' experience at a two-year college, and not view the only place that you can do that is at a four-year institution does dramatically help us expand access at a very, very low cost.

"I also think that you need to keep in mind as you begin to work through these recommendations some of the initiatives that have been developed by the community colleges. Their efforts to engage the electronic marketplace is tremendously important for this system that we are in. It is a shining example about how to go about that. Providing targeted training in specific areas: high tech or food processing to try to help the number of Oregonians who have access to the good jobs that the economy is currently turning out. And really the goal of trying to eliminate adult illiteracy in our time, which is something that is possible for us to do. That is not beyond our reach.

"Let me just wrap up my comments, and then I'll answer any questions, by talking just briefly about the fiscal situation that confronts this group. The last revenue forecast that we had projected a $450 million surplus, if you will, above the base. That is taking the current programs that the 1997 Legislature allocated and rolling them up on an inflation and population growth basis. Sounds like a lot of money and it is a lot of money. But if you take $150 million of that out for an ending balance, which is a precious thin margin in a $10 million budget, and then take another $150 million out, which is our liability to the federal retirees, you now have $150 million left on the table and that doesn't include anything for salary adjustments. I share this with you simply because I think we need to manage our expectations about what we are going to be able to do.

"Having said that, I want to make it very, very clear that I recognize and support the need for new resources into the System for higher education to implement these recommendations. And I will work very hard to do that. I don't know what the right number is but what we have to accomplish at the end of next session is enough money in the System to make it work and make it very, very clear that we have turned the System in this direction with the full expectation and likelihood that additional resources will continue to be put into this budget. I think it is clearly time for us to stop viewing our postsecondary investment as just another budget liability. We have to put our money where out mouth is if, indeed, we want to achieve the lofty goals we set for ourselves in the Oregon Shines, which was just reviewed.

"I also think this isn't totally a zero sum game. We do have the ability to reallocate resources within the General Fund budget, and I think we need to look at that. I'm not a great fan of base-budget budgeting. I'm much more entranced by zero-based budgeting and I can tell you after struggling with this for four years, it is pretty hard to move from here to there, but we are making some progress. Base-budget budgeting is like rear-view mirror driving. You basically don't look forward, you look backward and say, 'Well, this is what we are doing, so we are going to continue to do this, and then we will add some more things.' Once you put something in, it becomes part of the base and you never go back and ask yourself does that still make sense to do, is it consistent with our mission, and are there other priorities.

"I'm going to be asking all my agencies to go through that exercise. I am confident that we can make some reallocations within the General Fund. They are all going to be painful because every dollar that is in the General Fund has a constituency associated with it. When I mentioned to you that the new budgeting process will make your life easier and more difficult, it will make your life more difficult in that you can actually go back and get away from base-budget budgeting if you choose to do so.

"I will give you two examples. These are not endorsements of these actions, but I just want to kind of give you an example of what you're going to be able to do with this new model. You do have in one of the lump sums -- public services -- the Labor Education Research Center -- small business development centers and a number of other things. This was originally started with General Fund support. Over the years, the General Fund support has sort of dwindled away and now they are being picked up in part by student tuition. I think that you need to ask yourself a question about those and the other items that you have broken out. Are those consistent with what you are trying to do in higher education and, if you had to make a choice, and obviously we will try to reduce those kinds of choices that you will have to make, but if you had to make a choice, where would you put your money? What is your sense of priority?

"The other one is the Vet School. Please don't think that I am hostile to veterinarians. I have lined one's pockets enormously with my wife's dogs. If you look at the dollars there, it is about $4 million annually; $8 million in the biennial budget for 100 students. How many students could you get into your colleges' undergraduates for $8 million a biennium? And compare $8 million with some of the things you argued on the margin the last time. I'm not suggesting that we close the Vet School. I went down that road once and I know what that feels like. But I do think those are the kinds of choices we're going to have to look at.

"As I try and squeeze money out of the other budgets to transfer some of it to education, I want to be able to say that the educational institutions have also made some tough priority choices themselves. So again, I'm very pleased with what you did -- I think it is a tremendous job. I am very excited about it and will do all I can to make this work."

Ms. Wustenberg asked the Governor if he felt the direction for University Advisory Councils should come from the Board or if presidents, in their new capacity, should form their own.

The Governor indicated that if he had to choose today, it would come from the Board. "My vision is that you have a number of people, all of whom are not just boosters at the institution, but are there to ensure not only that the institution operates well and provide that kind of support and take up some of the responsibility of the Board, but also to review the changes and directions of that individual institution to make sure they are consistent with the policy that is being set by the Board. I think that linkage and that accountability is important."

President Imeson thanked the Governor for his leadership and for setting the direction that the Board has undertaken in the last several months. "It helps a lot when you know where you are trying to go as opposed to trying to pick where you are trying to go. Then it becomes more a matter of just making sure we put it together in the right way. That has been very useful," he said.

EXECUTIVE SALARIES

President Imeson asked for a motion to approve the Executive Committee recommendation that merit salary increases be awarded to the Chancellor and institution presidents in a split: three percent awarded in September 1998 and another three percent in February 1999. Further, that the motion include that beginning next year, any future increases in compensation for the Chancellor and presidents be based on performance following new procedures for goal setting and evaluation.

Ms. Christopher moved to approve the recommendation as stated by President Imeson. Mr. Willis seconded the motion. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

RECOMMENDATIONS OF THE BOARD GOVERNANCE AND STRUCTURE COMMITTEE

Background

Higher education in Oregon is on the verge of major transitions. The Board of Higher Education is charged with guiding these changes. The Governor's Task Force on Higher Education and the Economy and Task Force on College Access identified several important issues the Board must consider to maintain a competitive advantage for Oregon higher education. More to the point, one task force recommended "a fundamental overhaul of Oregon's higher education policy framework and governance." Although the task forces made several targeted recommendations, the Governor defined two specific areas for the Board to begin its work: an overhaul of the existing budget system and creating flexibility at the institutional level, allowing institutions to respond more quickly to market needs and changes. The Governor also encouraged the Board to consider ideas for fostering collaboration in higher education to include the community colleges and private colleges, and to review the current state mandated program approval process.

The Board Committee on Governance and Structure was charged with the task of defining Board governance for the immediate and foreseeable future. The early work of the Committee was to create a sense of where the Board is now, and an understanding of the current status, and how it evolved to this point. The Committee recognized and reviewed the many contributions of previous groups and teams toward development of the vision for higher education. Specifically, the Committee reviewed the work of the 2010 Task Force and the product of its work, "Education Unbounded," the several volumes of report data from the Chancellor's Solution Teams and the Governor's Task Force Reports, and several articles and reports about changes in higher education across the country and internationally.

The Committee outlined a plan with four major goals:

Throughout the past several months, the Committee has considered a number of strategies within these broad goals and makes the following recommendations to the Board.

System Vision, Mission, and Outcomes

The Committee recommended that the Board consider vision and mission statements for the Board, and goals and objectives for the Board that are consistent with and support the legislatively mandated mission and goals. (Date to be completed: July 1998)

The Committee recommended that following adoption of the Board vision and mission statements, the Board review the campus mission statements to assure they are consistent with the Board and System missions and, in the aggregate, represent a comprehensive Oregon University System. If necessary, the Board will recommend changes to the institutions and a schedule for returning to the Board with changes and/or modifications. (Date to be completed: October 1998)

The Committee recommended that the Board continue to develop measurable System outcomes. These will include:

A cluster of indicators for Board performance;
Goals and objectives for the Chancellor and presidents;
Regular and systematic evaluations of how well the goals are being met.

(Date to be completed: January 1999 and annually thereafter)

The Committee recommended that the Chancellor and Commissioner of Community Colleges develop a plan for ensuring seamless processes between two-year and four-year institutions. This will include the governance systems of both and strategies for greater access planning, articulation, compatibility or accommodations for residency requirements, financial aid, and student transfers. The plan will be submitted to the Board and subsequent quarterly reports will be made to the Board on progress made on key issues. (Date to be completed: October 1998)

The Committee recommended the Board affirm its commitment to the work of the Joint Boards of Education.

The Chancellor will meet with the Superintendent of Public Instruction, the Commissioner of Community Colleges, and a representative of the private colleges. The purpose is to plan ways in which to strengthen relationships among the various educational sectors to meet the educational needs of the state.

The CEOs will review the present structure for the Joint Boards and its working vehicle, the Joint Boards Working Group, and agreements will be made on how to strengthen relationships and provide the needed resources (fiscal and personnel) to accomplish joint goals.

(Date to be completed: December 1998)

Strengthen the Role of the Chancellor

Throughout the work of the Committee, some institution presidents and outside participants have questioned whether the Board wants to continue as a strong System. The Committee makes the following recommendations.

The Committee recommended the Board pass a resolution stating that public higher education in Oregon shall continue to operate as a system with a single Board and a Chancellor as the chief executive officer. (Date to be completed: July 1998)

The Committee recommended that annually the Chancellor provide the Board with goals and measurable objectives. These will be acted upon by the Board in July of each year and progress will be measured in June of the following year. The Committee recommends that the Chancellor's plan include, but not be limited to, measurable objectives to accomplish the following goals:

Strengthen working relationship with presidents;

Broker opportunities for the System, including partnerships with other education sectors (K-12, community colleges, private higher education), business and industry, and government;

Develop mechanisms to assure System responsiveness to the changing needs of the state.

(Date to be completed: annually)

The Committee recommended a thorough review of the Board's Bylaws, Policies, and Internal Management Directives (IMDs). Further, the Committee recommends that the Board's current policies be rewritten and integrated into the current IMDs. (NOTE: the Committee agreed unanimously that many of the current policies are outdated; that the IMDs carry more weight and if policies are important enough for the Board to approve, they should all be in one place, namely, in the IMDs.)

The Committee recommended that the review and rewrite of the Policies and IMDs be completed in time of adoption at the October 1998 Board meeting.

Clarify and Strengthen the Role and Responsibilities of Presidents

The Committee unanimously endorsed changes in language in the IMDs that clarify and strengthen the role of presidents, expand their span of responsibility, and assure accountability. (Date to be completed: October 1998)

Review and Change Organizational Structures and Operational Strategies

University Advisory Councils

The Committee recommended the formation of University Advisory Councils.

The Committee recommended that the Board make as one of its priorities in 1998-99 determining how Advisory Councils would add value to the institutions and the System. A committee of the Board will be formed and prepare a proposal for Board consideration by November 1998. The committee will include presidents as well as Board members. Model(s) will be piloted at a volunteer campus (or campuses) between November 1998 and June 1999. Based on the results of the pilot, the Committee will recommend a model(s) to the Board in June 1999. The proposal will be based on:

A thorough needs assessment to determine how Advisory Councils would strengthen institutions, individually, and the System, collectively.

Review of other state models that use local boards or councils and their effectiveness including Texas, North Carolina, Wisconsin, and from within the System. Also reviewed will be the concept paper dated June 24, 1998 (included in the Board's supplemental materials -- on file in the Board's office).

Investigate the legal implications of Advisory Councils, and the roles and responsibilities they could assume.

A decision will be based on the expectation that each campus will establish a University Advisory Council.

The IMD that is developed directing the establishment of University Advisory Councils will be sufficiently flexible to take into consideration the unique nature and needs of each institution.

Concurrent with the development of the policy will be a delineation of responsibilities and authority delegated to the Board, Chancellor, presidents, and University Advisory Councils. This will be presented in matrix form.

Timelines for the establishment of University Advisory Councils will be tailored to the realistic priorities of each University.

Further consideration of the concepts of Constituency and Development Councils will not be pursued at this time, but their use will be considered in the future.

Board Business: Meeting Schedule and Location, Campus Visits, Board Orientation and Development

In making annual meeting and activity plans, the Board will review, with the Board Secretary, the resources allocated to the Board for its work.

The Committee recommended that the Board adopt a plan to conduct no more than six, and preferably five, business meetings per year. The recommended months, with some examples of the routine items, are:

July -- to accommodate, in even numbered years, the biennial budget proposal and capital construction budget requests; the Academic Year Fee Book, semi-annual audit report and plan, semi-annual capital construction report, and the Board's annual Renewal Work Session.

September/October -- annual/fourth quarter investment report, report of grievances filed, and annual meeting of the Joint Boards that is currently scheduled for September.

January/February -- Summer Session Fee Book, honorary doctorates, admission policy, semi-annual audit report and annual external financial audit report, second quarter investment report, enrollment report, and semi-annual capital construction report.

April and possibly June -- third quarter investment report, biennial budget (even numbered years), annual report on minorities/women business enterprises and emerging small business.

When there are items requiring more immediate action, conference call meetings will be scheduled. (Date to be completed: July 1998)

The Committee recommended that the Chancellor's Office staff review the reports that are currently required by OARs, IMDs, policy, or Board request. The Board should determine if 1) they continue to be required and 2) if there are ways in which the reports can be aggregated and/or presented in a manner that would serve as continuing development sessions for the Board. Examples of aggregated reports that could be used for information sharing and Board development are:

Access, broadly defined, could include reports on diversity as it relates to students and faculty (including reports on status of women and minorities), the PASS Project, WUE, transfer and articulation.

Performance/accountability -- in addition to what will emerge as a new format for reporting progress on achieving performance objectives, reports such as Where Have All the Graduates Gone, Return on Investments: Employment Five and Ten Years Later, Status Report on OSSHE's Response to Changes in Education Professions, and One Year Later: 1994-95 OSSHE Bachelor's Graduates.

(Date for plan to be completed: September 1998)


EITHER

The Committee recommended Board meetings, with the possible exceptions of the July Renewal and Joint Boards meetings, be held in Portland, and the format for campus visits be modified. However, since the Board feels strongly about the value of campus visitations, some guidelines to ensure that campus visits continue include:

Every campus should continue to have a Board visit once every other year. At least three Board members would be identified to visit a campus, the time of which would be mutually agreed to by the Board members and the campus president. The purpose of the visit would be for Board members to gain a more in-depth understanding of the institution and the specific successes and/or challenges it faces. These visits should last for a full day and one Board member would be identified to report back to the full Board the impressions, strengths, accomplishments, and any problems/concerns that might have been raised.

Every Board member will set a goal of visiting at least one institution each year, on a rotating basis. (Schedule and assignments completed July of every year)

OR

The Committee recommended that Board meetings continue to be held on OUS campuses on a rotating basis.


The Committee recommended that at least two regional topical meetings be held around the state each year. Topics for consideration include: public/private partnerships, higher education and the state's economy, distance education, and technology. The Board Secretary will annually recommend a schedule for these sessions in consultation with the Executive Committee. Expenses involved in such meetings will be closely evaluated and monitored. (Design to be completed in September of each year)

The Committee recommended that one hour at the end of each Board meeting be reserved for an open discussion of topics of interest to the Board. If a topic emerges in advance, the Board Secretary will work with the Executive Committee to make the necessary arrangements; additional issues for discussion will be invited in an informal, open, work session format. Institution presidents, and faculty and student leadership will be invited to the table for these sessions.

The Committee recommended that, at least every other year, OUS sponsor a statewide conference on a major topic of interest. Attention will be paid to the expenses involved in any such event. (Date for design to be completed: September 1998)

The Committee recommended that focused, non-standing committees be used to advance specific policy areas of the Board's agenda and that the committees include representatives from the K-12, community college, private higher education, and business and education sectors. (Date to be completed: as needed) Note: the Committee will bring a recommendation to the September/October Board meeting concerning standing committees.

The Committee recommended development of a program of new Board member orientation and ongoing Board development.

The Board Secretary will convene a subgroup of the Committee to:

Recommendation to the Board

The Committee on Board Governance and Structure recommended Board adoption of the recommendations as submitted.

Board Discussion and Action

Mr. Willis reviewed the background of the work of the Governance and Structure Committee and summarized the recommendations presented to the Board. There was general discussion of the items as presented. Mr. Willis underscored that some of the work of the Committee is unfinished until the Board has had an opportunity to discuss the directions being recommended.

On the topic of streamlining the policies and IMDs of the Board, Mr. Willis observed that different Boards have done things differently and adopted a policy here and a policy there. Some of those have been incorporated into IMDs and others in a broad area called Board policy. "We discovered that we really only need one system to define and bring these together and work is progressing on this," he said.

"One of the things the Governor asked us to do was to push authority out to the institutions and allow them to operate with less bureaucracy, and that is where we began the discussion about Advisory Councils. Some of our discussion has been to better understand and define the capacity of and expectations for the presidents. Part of our responsibility is to do that and have it clearly defined. Those expectations have to be consistent with the System outcomes. There is quite a bit of work that needs to be done. Along with that idea is a piece the Governor mentioned about the Advisory Councils."

Mr. Willis indicated there had been a lot of discussion about the Advisory Councils, but the Committee had not agreed on a final recommendation. Chancellor Cox commented that the presidents had discussed this topic and indicated there were three institutions, each with a different approach, that were prepared to move ahead on experimenting with a model of an Advisory Council. Dr. Vines indicated that a fourth institution had also expressed interest. There was consensus that the models varied and Ms. McAllister reminded the Board that the Committee had made it very specific in the recommendations that the Advisory Councils should be sufficiently flexible to take into consideration the unique nature of the campus.

Mr. Imeson noted that there was reference to a committee of the Board being formed to prepare a proposal for Board consideration by November 1998. "My question is," Mr. Imeson noted, "that it sounds as if we might be able to do something sooner than that with several of the institutions. This isn't meant to preclude us from doing that, is it?" Mr. Willis responded it was not. Dr. Vines suggested that the Board subcommittee could work with the volunteer campuses so that by November, their model would be ready to be piloted at the same time the subcommittee returns to the Board to talk about what they are recommending so those pilot models could be incorporated in the recommendations that come to the Board in November. "June 1999 would be when the Board would finally say, 'this is working,'" she said.

The last of the Committee recommendations focused on meeting schedules and locations -- this included a reference to the Board convening no more than six, and preferably five, times a year. It was suggested that an hour should be set aside at the end of every Board meeting to focus on current issues and ideas. Dr. Vines pointed out that the either/or recommendation spoke to whether the Board continues to meet on campuses or whether it meets in Portland for the five-six meetings a year. The 'or' part of the recommendation is if the Board voted to convene the Board meetings in Portland.

There was a lengthy discussion on these topics and the consensus of the presidents and members of the Board was that it was critical for the Board to get around the state and be visible on the campuses. President Risser observed, "I think that part of the role of the Board is to help support higher education and make a representation in various parts of the state, to look at various constituencies, and I would encourage the Board not to give up that sense of responsibility, and to think more broadly of its role in the state and higher education. And I think not to do that, not to meet in different parts of the state with different constituencies, would be an important omission."

Chancellor Cox added that it was important to consider meeting in places of the state where there is no campus, such as the present meeting in Bend.

Returning to an earlier discussion about allowing time at each meeting for discussion Mr. Imeson said, "I am wondering whether we should try to have some time at each meeting, and there would need to be some rules around it to make it workable, for some public input of whatever nature or variety." Mr Willis asked if he meant a call to the audience. "I think that is a great idea. Part of what we are trying to do is to start to shift the structure slightly in a new direction without creating a lot of havoc." Chancellor Cox indicated that he and Vice Chancellor Vines had been in systems where there was a part of the agenda set aside for public input that was limited to three-five minutes per speaker. There was general agreement that this was a suggestion worth consideration, but guidelines should be developed.

In closing the conversation, President Imeson suggested withholding a motion to accept the Committee report until further discussion later in the Board meeting.

OAR 580-010-0037, RESIDENCE CLASSIFICATION OF MEMBERS OF OREGON TRIBES

Background

At the June 21, 1996 meeting, the Board heard a report on American Indian student representation in the System. Tribal representatives expressed interest in programs designed to bring tribal members back to Oregon. During the discussion that followed, representatives from the American Indian community suggested the possibility of assessing tuition in a manner that recognizes the historic ties that members of Oregon tribes have to the land within the geographic boundaries of Oregon, whether or not they reside in Oregon. Other states, such as Washington, have programs through which members of indigenous tribes are considered residents. These programs recognize that members of the tribes were forcibly removed or systematically dispossessed of ancestral lands. UO President Frohnmayer offered to lead an effort to develop such a program, and SOU President Reno expressed support for a program available to all campuses. Chancellor Cox agreed and asked President Frohnmayer to work with staff in the Chancellor's Office on the project.

Since that time, staff in the Chancellor's Office and at the UO have worked to assure that the program is based on a sound legal foundation, and the University has sponsored research to identify appropriate tribes for inclusion. Further meetings have been held with tribal representatives, seeking their input and guidance. The proposed administrative rule would assess resident tuition to enrolled members of Native American tribes which had traditional and customary tribal boundaries that included parts of the state of Oregon or which had ceded or reserved lands within the state of Oregon regardless of their current state of residence. Students seeking to be assessed resident tuition under this provision must document their tribal enrollment under procedures to be established at each institution.

A hearing to receive public testimony on this proposed rule was conducted on June 30, 1998, at 10 a.m. in room 121 of Susan Campbell Hall on the UO campus. No testimony was presented at the hearing.

Staff Recommendation

Staff recommended the Board adopt OAR 580-010-0037, Residence Classification of Members of Oregon Tribes, as follows:

Residence Classification of Members of Oregon Tribes

580-010-0037 (1) Students who are enrolled members of federally recognized tribes of Oregon or who are enrolled members of a Native American tribe which had traditional and customary tribal boundaries that included parts of the state of Oregon or which had ceded or reserved lands within the state of Oregon shall be assessed resident tuition regardless of their state of residence.

(2) For purposes of this rule, the federally recognized tribes of Oregon are:

(a) Burns Paiute Tribe

(b) Confederated Tribes of Coos, Lower Umpqua and Siuslaw

(c) Confederated Tribes of Grand Ronde Community of Oregon

(d) Confederated Tribes of Siletz Indians of Oregon

(e) Confederated Tribes of the Umatilla Indian Reservation

(f) Confederated Tribes of the Warm Springs Indian Reserva tion

(g) Coquille Indian Tribe

(h) Cow Creek Band of Umpqua Indians

(I) Klamath Tribes

(3) For purposes of this rule, the Native American tribes which had traditional and customary tribal boundaries that included parts of the state of Oregon or which had ceded or reserved lands within the state of Oregon are:

(a) CALIFORNIA

(A) Benton Paiute Tribe

(B) Big Bend Rancheria

(C) Big Lagoon Rancheria

(D) Blue Lake Rancheria

(E) Bridgeport Indian Colony

(F) Cedarville Rancheria

(G) Fort Bidwell Indian Tribe

(H) Hoopa Valley Tribe

(I) Karuk Tribe of California

(J) Likely Rancheria

(K) Lookout Rancheria

(L) Lytton Rancheria

(M) Melochundum Band of Tolowa Indians

(N) Montgomery Creek Rancheria

(O) Pit River Tribe

(P) Quartz Valley Indian Community

(Q) Redding Rancheria

(R) Roaring Creek Rancheria

(S) Smith River Rancheria

(T) Susanville Rancheria

(U) Tolowa-Tututni Tribe

(V) Winnemucca Colony

(W) XL Ranch

(b) IDAHO

(A) Nez Perce Tribe of Idaho

(B) Shoshoni-Bannock Tribes

(c) NEVADA

(A) Duck Valley Shoshone-Paiute Tribes

(B) Fallon Paiute-Shoshone Tribe

(C) Fort McDermitt Paiute-Shoshone Tribe

(D) Lovelock Paiute Tribe

(E) Pyramid Lake Paiute Tribe

(F) Reno-Sparks Indian Colony

(G) Summit Lake Paiute Tribe

(H) Walker River Paiute Tribe

(I) Winnemucca Indian Colony

(J) Yerington Paiute Tribe

(d) OKLAHOMA

(A) Modoc Tribe of Oklahoma

(e) WASHINGTON

(A) Chehalis Community Council

(B) Colville Confederated Tribes

(C) Quinault Indian Nation

(D) Shoalwater Bay Tribe

(E) Yakama Indian Nation

(4) A student seeking to be assessed resident tuition under the provisions of this rule shall submit, following procedures prescribed by the OUS institution where the student seeks to enroll, a photocopy of tribal enrollment which documents tribal membership.

Board Discussion and Action

Director of Legal Services Melinda Grier summarized the background of the recommendation and the process used to review practices in other states before formulating the present recommendation. Chancellor Cox commended the UO and the leadership of President Frohnmayer in this endeavor. Ms. Grier reported there had been a public hearing to which no one came. However, Dr. Andrew Hashimoto of Oregon State University sent a letter expressing the strong support of OSU for the initiative.

Mr. Willis thanked both Ms. Grier and President Frohnmayer for their leadership. "I think that the expectation is that the numbers (of students) that it will generate are not huge, but the significance of the gesture is tremendous. I don't know if people actually recognize that yet, but it is a powerful gesture in the eyes of the tribes." Ms. Grier was asked if current students would be notified to which she responded, "I expect they will be, but I think that is a really good point that we will make so that if there are current students who would qualify, who are now paying out-of-state tuition, we would make sure that they understand that they would qualify for in-state residency."

Ms. Wustenberg moved and Ms. McAllister seconded the motion to approve the staff recommendation. On roll call, the following voted in favor: Directors Aschkenasy, Christopher, Koch, McAllister, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

Director Lussier was out of the room at the time of the vote.

1999-2001 BIENNIAL BUDGET REQUEST

Executive Summary

The seven campuses of the Oregon University System (OUS) are a major force in the economic and civic life of the state, responsible for providing educational opportunities to citizens of all ages and income levels, so they can gain the skills and insights needed to succeed in a global economy. The economic and social environment in Oregon and the Northwest is changing dramatically, and OUS is changing as well.

Recently, state government leadership requested that the Board of Higher Education craft new structures that would streamline governance and empower campus presidents, faculty, and administrators to make swift decisions to deliver programs where they are needed in an environment of increasing competition. The Board has responded by reconfiguring Board governance, installing performance-based measurements for the campuses, and setting new directions to prepare OUS for the 21st century.

In the early 1980s, OUS adopted what was then a modern method of allocating state tax dollars and tuition income to the campuses to support the institutions in meeting their missions. Known as the Budget Allocation System (BAS), a similar model was used in many states to provide higher education cost reimbursement through more than 240 categories of expense, ranging from utility billing to program costs. The usefulness of the BAS Model depended upon two critical factors: dependable state support and moderate changes in enrollment.

With the passage of Measure 5 in 1990 and the reduction in state support for the OUS that followed, the Board was faced with difficult choices. Program reductions, tuition increases, and enrollment declines followed the steep decline in state tax support, and the foundation of the BAS Model -- steady revenues in a stable environment -- was swept away. To meet the hard tests of this environment, the Board, the Chancellor, and the presidents of the campuses began to think, plan, and work their way through to a new foundation for funding the continuing missions of teaching, research, and public service.

Instead of simply reacting to the changes brought about by Measure 5, the Board sought to create a more ideal system of public higher education that would prosper in this new and dynamic environment. Through the Higher Education 2010 Advisory Panel, made up of private industry leaders, legislators, and educators, "Education Unbounded: A Vision of Public Higher Education Serving Oregon in the Year 2010" was developed to identify what the key elements of a successful OUS would be 15 years into the future. Following the adoption of the vision statement, the Board began a strategic planning process to develop solutions for the problems standing in the way of that vision for public higher education.

To chart the course to the future, the Board formally adopted four primary goals to guide Oregon's public universities: 1) access for qualified Oregonians to degree programs; 2) quality programs on each campus; 3) cost-effective operations; and 4) employable graduates. To measure success of the campuses and the System in achieving these goals, the Board has adopted a set of performance indicators that will result in an annual report card. To provide incentives to the seven institutions in pursuing the goals, the Board has included performance funding as an element of the budget, to reward outstanding achievement.

In 1997, the Board appointed two committees: Budget and Finance and Governance and Structure. The Budget and Finance Committee was charged with devising the new budget model to achieve the Board's goals in the new funding environment. The new finance system is flexible, student-centered, and responsive to the needs of the educational marketplace for new programs and courses. Each campus will be free to be more entrepreneurial under the new budget model and the institutions will be measured by the success they achieve in this new environment.

State government officials have asked the Board to develop a budgeting structure that deals with the following challenges:

These themes were also emphasized by Governor Kitzhaber at the December 1997 meeting of the Board. The Governor called for a fundamental overhaul of Oregon's higher education policy framework and governance, while affirming his support of the Board's central authority for the University System and increasing the autonomy of its seven institutions. In his recommendations for action, the Governor acknowledged the "decade of disinvestment (in higher education)" and indicated that "achieving the changes we are now contemplating will require continued investments -- that's a given."

The Board responded to state government leadership and adopted five principles to guide the development of a new budget paradigm:

OUS leadership believes the proposed acquisition and allocation model the Board Committee on Budget and Finance has adopted is consistent with these five principles and responds to state government leadership's request.

The current service level component of the budget request conforms to the directions from the Department of Administrative Services . This component is required to cover previously agreed upon pay adjustments and inflation for supplies and services, as well as new building operating costs. However, this budget introduces a new approach to both, requesting and eventually allocating resources, entitled "the base budget buildup." The base budget buildup is critical to implementing basic change. The base budget buildup preserves and expands access, especially geographic access, by increasing student aid opportunities and maintaining 1996-97 tuition rates for Oregon undergraduates.

If funded, this new budget system will allocate resources to better serve thousands more students in the next decade and to provide leadership in research and public service. The budget is designed to support existing, developed programs ranging from the liberal arts to education, to agriculture and forestry, as well as directing resources to expanding programs in biological and physical sciences, math, engineering, and computing sciences.

The base budget buildup also addresses the current condition in which the multi-year cumulative effect has led to shortages and hidden cross-campus subsidies. Base funding is needed to avoid disruptions and elimination of programs now funded by diminishing operating balances. This funding will also reduce the level of deferred maintenance and provide adequate maintenance support for all state-sponsored activities as a transition to the new environment.

For the 1999-2001 biennium OUS seeks state support for thousands of new students requesting access to OUS campus programs, distance learning and University Center courses; funding of the new budget model to give the Oregon public universities the means to educate these students; and funding for programs that meet the needs of basic and emerging industries. In partnership with the executive and legislative branches of state government, and the business, industry, and civic leadership of the state, OUS seeks to confirm that its new direction and methods of assessing progress are on target and that its missions are aligned more closely with the future of Oregon.

Staff Recommendation to the Board

Staff proposed that the Board take the following actions on the OUS 1999-2001 Biennial Budget Request (a copy of the budget document is on file in the Board's office):

Approve the 1999-2001 current service level request as presented in this document;

Adopt the proposed new budget allocation model, as recommended by the Board Committee on Budget and Finance, and approve a request to be incorporated as an extraordinary essential program package necessary to fund the proposed model to support students as identified in targeted programs;

Approve program policy option packages as presented above; and

Authorize the Chancellor to present the approved budget to the Governor's Office on or before September 1, 1998 in a form agreed upon with the Director of the Department of Administrative Services.

Board Discussion and Action

Vice Chancellor Anslow introduced the Biennial Budget proposal by indicating it had been a challenge to put together because staff are still caught in a bit of a dilemma in terms of the form and structure of the budget request that is called for by the Department of Administrative Services (DAS) and the new budget funding model being recommended by the Board Committee on Budget and Finance. "We attempted to overcome the impediments to access, to build a student centered funding model, to have the process of budget acquisition and allocation as transparent as possible, to have support explicit, and to develop incentives for market based responses," Mr. Anslow explained.

"I have spent a lot of time in budgeting over the years, and one of the things that we struggled with the best approach to overcome several of the perceived weaknesses of the current budget model. It isn't necessarily the model itself that is the challenge, but all of the budgetary policies that surround the model that cause it to not be easily understood," Mr. Anslow continued. "We struggled with all of the budgetary policies surrounding the model. It is quite complex -- over 250 moving parts to it. The BAS model was based on a teaching model from the 1970s and the budget policy surrounding it did not recognize all the students that needed to be served. The enrollment corridor said either 200 under or 200 over. No budgetary reward was built in if campuses achieved more. The work that came forward from the Committee, campuses, and presidents was to try to overcome these weaknesses. The old model was also based on a steady set of resources, primarily from state government."

Vice Chancellor Anslow overviewed the various components of the new budget model and indicated that the entire package, if fully funded, would require an increment in 1997 terms of approximately $120 million dollars in the biennium or $60 million per year. "How do we anticipate the citizens of Oregon would benefit from this?" Mr. Anslow asked. "That is a key consideration, in terms of our ability to address the access front, to maintain geographic access, a particular component as it deals with EOU and OIT, as well as basic services for regional institutions.

"If you look at models across the country that are driven by a per student basis, the ideal campus is around 7,000 to 9,000 FTE students, mostly undergraduate with some master's programs. These run most efficiently. When you have a campus such as EOU or OIT, essentially with 2,000 FTE enrollments, you need some kind of mechanism to make sure that the gym and library stay open, that they have a computing center, president and business officer, and so forth. Therefore, we have identified an amount of money specifically targeted as revenue from the state government that would support geographic access at the regional institutions as part of the budget. Further, we believe that if this model is adequately funded, that in terms of affordability we can preserve all of the current student aid opportunities. Campuses believe that they could even expand beyond the current level in terms of offering additional scholarships and tuition remissions for students. It is our assumption that this would provide for continuing the tuition rates for Oregon undergraduates at the 1996-97 level. In addition, there is a specific component that would provide for strengthening the community college partnerships."

Mr. Anslow pointed out that a second thing the Board is attempting to do is the extraordinary program initiative to deal with quality, performance, and employability and that this has likewise been introduced into the new budget model as performance based funding. "We are turning the whole model of funding on a student basis -- that is the number of students that are served. And the campuses receive the tuition revenue in terms of the number of students they serve," Mr. Anslow explained. "But beyond that, the Board has emphasized the fact that we have to improve student retention and graduation rates, what the students learn, whether or not they are successful in their work experience, whether they pass national exams, and so forth. We built these things into the model under performance based funding and we are going to start slowly and ramp up over a couple of bienniums."

A third reason for the new funding model deals with maintaining existing operations. "What I have discovered since coming here is that, because of withdrawal of significant amounts of state funds, some universities have tried to keep programs going by using their ever diminishing fund balances, always hoping for a little bit better tomorrow. And if you use your fund balance, you get to do that once. You don't get to repeat it. We have the situation, even after some significant administrative cuts during the 90s, that there is the possibility of program eliminations if there isn't some level of increased support. And campuses reduced their level of maintenance so that a baseline study shows a fair amount of deferred maintenance."

Continuing, Mr. Anslow said, "One of the items that I would recommend that the Board take out of the request is the area of incremental funding for utilities and maintenance for new facilities. In effect, by moving to a student model, even though it is a requirement of the current service level development, we are now getting funded for those requirements based on the number of students, or we will in the future. We shouldn't be asking for the same thing twice. My assumption is, if this is successfully adopted as policy, we will not be into this kind of current service level process as we move into the budgetary cycle in the next biennium. Instead, we would argue that OUS campuses propose to serve this many students, this is what you think your requirements are to do that, and you get away from this kind of cost plus process in the future."

Dr. Aschkenasy concurred and asked if there were any way of eliminating the "current service" level terminology. Mr. Anslow responded it was his hope that in the next cycle there will no longer be a need for that term. "DAS has certain powers and they have a certain order of things," he explained. "What we are going to have to sort out in the next two years is a mechanism that deals with what OUS campuses will do with the money and still conform to the requirements the DAS director sets. But to do that, we have to work with DAS to get there."

Mr. Imeson added that there have been discussions with Jon Yunker, director of DAS. "We would frankly prefer not to go through the current service model approach. From the state's perspective, they are looking at us as a state agency and they are trying to align things as much as they can across state agencies, make them apples to apples, and they prescribe the current service model approach."

Mr. Anslow moved to the Legislative Program Policy Options, an attempt to identify areas that are reviewed by the Executive Department and a decision is made relative to the kinds of items they would want to recommend for funding. He and Vice Chancellor Clark explained the various categories of requests indicating that all of the campuses had been involved in the development of these options through the Academic and Administrative Councils and, subsequently, through conversations with the presidents. They had solicited recommendations for programs that might be included in requests for specific legislative action. (A copy of the options is included in the budget document on file in the Board's office.)

Mr. Anslow explained the first proposal that focused on providing for a three percent per year salary adjustment into the 1999 year and into the year 2000-01. The increases are based on the best judgment of staff about inflation and/or salary adjustments for faculty throughout the country, and the demands of the marketplace. Mr. Anslow said that the salary adjustments had been arrived at by using peer institutions around the country. The result of the analysis is that, "The salary condition is different at PSU than it is at OIT, for example, and there is a range of differences. Campuses would have to decide, if the base budget build up is fully funded, within that money they will be able to make salary adjustments and deal with the various recruitment and retention issues. Beyond that, we would propose a kind of satisfactory performance based increase. But the Governor's Office could say, 'now salary increases are going to be two percent and two percent, not three and three.'"

Mr. Imeson asked if there were some linkage of OUS' request and what is occurring with the rest of state salaries. Mr. Anslow indicated there would be. "We will have to make a presentation to the Governor, but his office will take some of the responsibility in terms of setting salaries. In several cases, for faculty as well as the classified staff, salaries and compensation would also be subject to collective bargaining processes."

Vice Chancellor Clark explained each of the other Legislative Program Policy Options and answered questions of the Board members. There was considerable discussion regarding the Engineering/ Computer Science area as the Board attempted to clarify those program aspects that had been funded in the current year and those that were new requests.

In concluding the presentation of the budget request, Vice Chancellor Anslow reminded the Board that, "In 1987, OUS was 12 percent of the state budget. As that state budget grew, the percentages that came to OUS continued to decline. Now, in the current year, OUS is less than seven percent of the state budget. We have experienced a slow, steady, year-by-year decline. What we are asking the Board to consider in terms of the current service level and the base budget build up would bring us back to 1996-97 levels if the state were to afford that, about seven percent. I am not whining, I am just trying to put a perspective in terms of the funding requirements that would fund the base under this new approach. I would remind you that the old model was never funded adequately, and if we try to fund under the old model, it would require a $300 million per biennium increase to fund at 100 percent. People have complained about the old model and over time it had shrunk. Our budget has become much more tuition dependent and would require both income from students and the state to fully execute the model."

Chancellor Cox asked how OUS funding would compare with corrections and mused that it would be just the reverse pattern. Mr. Anslow said that he couldn't make that comparison but offered that much of what has happened in the state is increasingly the state's responsibility for the K-12 structure, which used to be funded by local property taxes and other taxes, and for corrections. Some of the mandates that existed have crowded out what essentially people thought about as a discretionary expenditure. Higher education is considered a discretionary expenditure. "I think what we need to do is convince people that it [higher education] is absolutely a critical investment and for a small percentage change in terms of the direction of the General Fund, that at least we could get the new model fully funded, and perhaps some of the other items that we are asking for, as well."

Mr. Koch indicated that he couldn't find a definition for the technology fee that students are charged on each campus. "What exactly does the technology resource fee pay for on the campuses?"

Mr. Anslow responded that these fees were introduced a few years ago to provide computer laboratories and other services. They vary from campus to campus in terms of use. Vice President Moseley (UO) and Presidents Reno (SOU) and Dow (OIT) explained how those resources were used on their campuses.

Continuing, Mr. Koch said that, "The reason I asked the question and wanted to get it out there, is that we are looking at the Legislative Program Policy Options, and we have a specific option designed towards trying to gain more money for the System to satisfy the technology needs on the campuses to respond to what has been deemed as a disinvestment of the state over the last several years in higher education. The impression I have is that the fee structure on the campuses has not really been closely looked at as to how it plays into this new budget. I am wondering if, on both the Technology Legislative Policy Option, and the Engineering Option there can't be some consideration given to rolling back or eliminating the technology education fee and engineering resource fees as we are looking at increasing state investment in those programs and services that are on campuses."

Vice Chancellor Dryden confirmed that the Engineering Option was based on an assumption of the continuance of the current fees. Vice Chancellor Anslow added that Oregon spends very little on technology relative to institutions around the country. Even with that low spending, some campuses have done some remarkable things in terms of national recognition. "My guess is that even if the state comes in with a significant amount, at least for the short term, student support would be needed for some of the computer labs and other expenses," Mr. Anslow concluded.

Mr. Imeson asked Mr. Koch if he was proposing to add money to the Policy Options to retroactively eliminate fees. Mr. Koch responded that as the Board is talking about wanting to remove financial barriers to access, consideration should be given to removing some of the student fees that have been instituted in the past to make up for deficits in the state level of funding for higher education.

Mr. Lussier indicated that he appreciated Mr. Koch's perspective. "My sense is that it also brings up governance issues on how to approach these kinds of decisions and the spirit is to get those at a level where people can know and understand the details. I don't know or understand the details enough to make a recommendation about that and one of the questions that I would have is, so we did that as a policy approach, what would be eliminated in terms of services to students and would that be a good thing. This says to me, in my own mind, that has to be taken as a global approach and not as a line item approach because we are incapable of making those line item recommendations without understanding the interaction that needs to take place on the campuses. My feeling is that is the best venue."

Ms. Puentes asked if there was a connection between the Legislative Policy Option on instructional technology development delivery and the work of the community colleges as presented by Commissioner Bassett at the Joint Boards Working Group meeting.

Vice Chancellor Clark indicated that she had not heard Mr. Bassett's presentation. However, there has been ongoing work with the community colleges as they have been working on the development of lower division courses and OUS has been working on upper division completion and graduate level courses. "Where these might come together," Dr. Clark continued, "is that we are asking for resources in our Oregon Network for Education (ONE) creating an Oregon electronic university."

Chancellor Cox added that there is a similar policy option as part of the community college budget and the independent colleges have put some ideas forward, as well. The Governor's Office will look at these and make decisions as to which things interest them and fit their targeted priorities. At some point, all entities will be called together to reconcile these options.

Mr. Koch asked for clarification on the Graduate Professional Education and another resource fee item. "I think that the assumption was made that the resource fee would be kept level without any consideration necessarily given to what it would cost to administer that program and what the state support should be without that additional fee being covered by students. I would like to get some other opinions on this."

Mr. Anslow responded that there had been a lot of discussion around each of the programs and the way in which the approximation of costs had been determined. "There are 15 arguments around this item in terms of moving one category to the other and I think we just have to keep these together at least one cycle." Mr. Imeson expressed strong agreement. "There were a lot of discussions about 'move it this way or that,' but the question for the Committee in the end was, 'Is this a package that made sense?' And I think that is what we have."

Continuing, Mr. Koch indicated that if there were a strong sense of the Board that the model not be modified at this time, there were questions remaining about differences in how program costs were being borne by students through fees. Chancellor Cox reminded Mr. Koch that one of the pledges already made about the new model is that, "Unlike the previous model, it will be reviewed on a periodic basis, and we are building it as we go. We know it is not going to be set in concrete."

Dr. Aschkenasy expressed a philosophic concern. "I thought we were going in exactly the opposite direction than what Mr. Koch seems to be recommending, which is that the institutions will have increased authority and accountability. If the program at the UO is so wonderful that twice as many people sign up at $3,000, we should encourage that as opposed to saying that we will evaluate your performance against these indicators, but in the meantime, don't do this and that." Mr. Lussier concurred that the Board should not pick a particular part of an issue like the budget model.

Mr. Anslow explained that he and his staff had looked at funding models that are used in different states; national cost data; OUS cost patterns; and how to take a 250 cell model and approximate it down to reasonable groups. "If you move one cell now, there are four more arguments for something else and everything will begin to move."

Mr. Koch asked what would happen if the Board is not successful at getting the resources represented in the budget request. "Are we going to be looking at scaling back the programs we are putting forward or are we going to be looking at financing it in another way?" he questioned.

Mr. Imeson said that he did not have an answer to the question because, "We've worked very hard on behalf of the budget that we've developed. There are two additional revenue forecasts that will come out, so we don't know the state's final fiscal situation. Once this leaves us, it is an issue we work on in partnership with the Governor. It is something we need to be thinking about increasingly as we are part of the dialogue."

Mr. Willis moved and Ms. Christopher seconded the motion to approve the staff recommendation. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

CAPITAL CONSTRUCTION BUDGET REQUEST, 1999-2005

Staff Report to the Board

Each biennium, prior to the legislative session, the Board of Higher Education submits a capital construction budget request to the Governor covering the ensuing three biennia, with specific project information for the upcoming biennium. The following covers the period 1999-2005, with detailed information provided only for the first biennium. For 1999-2001, the capital construction budget request recommended to the Board totals almost $231.5 million for the seven OUS campuses. Approximately 75 percent of the request ($170.7 million) pertains to renovation and construction of Education and General facilities (E&G), including Systemwide projects used to support the instruction, research, and service missions of the System. The remaining 25 percent (almost $60.7 million) is for projects carried out by Auxiliaries, including student service facilities. A supplement to this docket item has been prepared and is on file in the Board's office.

Organization of the Report

This report is organized as follows:

Part I summarizes overarching issues and the proposed OUS strategies.

Part II presents the proposed OUS 1999-2001 Capital Construction Program. Information is organized to cover E&G Systemwide, E&G Campus-Specific, Auxiliaries and Student Building Fee projects. For each section, information is presented on the funding and the program emphases of each element. The magnitude of bond issuance that would be required for Article XI-F(1) and Article XI-G bonds is given. Debt service projections are provided. A list of equipment and projects for which Certificates of Participation would be sold also is provided.

Part III briefly reviews the proposed 2001-03 and 2003-05 Capital Construction Program, and provides tables displaying the outlying years of project requests.

Part IV contains the staff recommendation.

Supplement provides summary information on each project included in the 1999-2001 proposed program as well as additional tables on the 1999-2005 program and a summary of the 1997-1999 program (current), including Emergency Board actions to date.

PART I - BACKGROUND AND MAJOR ISSUES

The Oregon University System's capital construction program is an essential element of a multi-faceted instructional delivery system. The capital program must address extensive physical obsolescence (capital repair and deferred maintenance) and increasing code-driven needs in aging facilities, while meeting growing enrollments and specialized academic program needs. This biennium's capital program again reflects the view that the campus facilities are an integral part of the academic missions. It is designed to promote rational capital asset management, more efficient use of existing resources (including space), and continued reduced reliance on scarce state funds.

Facilities needs are directly related to the scale of the higher education enterprise, its age, and major issues affecting the capital construction program. The seven OUS campuses, along with growing university centers in Bend, Coos Bay, and greater Portland, comprise nearly half the total number of major state buildings in Oregon. A recent study identified about 13 million gross square feet (gsf) of space, excluding student residential facilities and parking structures (estimated at 3.5 million gsf), with a current replacement value in excess of $2.2 billion.

These campuses function much like small municipalities to meet the needs of a student population approaching 100,000 in head count. Classrooms and lecture halls must be designed for on-site and remote access. In addition, laboratories, complex research facilities, libraries, performance spaces, central utility systems, and advanced computer networks must meet the changing requirements of the new learning environment. Housing and dining complexes for more than 8,000 students must also be enhanced to meet changing expectations and needs of today's students.

The magnitude of current capital needs for the OUS closely correlates with its development history. Following a national pattern, the campuses grew relatively slowly until the 1920s, when the first growth began in earnest. A second wave of construction coincided with the post-World War II baby boom. In Oregon, nearly 40 percent of the square footage of the OUS campuses (5.2 million gsf, again excluding housing and parking) was built between 1955 and 1970. Some 2.25 million gsf of space was built in the 1960s alone. This pace of growth has not been repeated, although smaller building resurgences occurred in the 1970s and late 1980s. The system of funding these capital assets has also shifted from significant sources of federal and state funding for major facilities in the 1950s and 1960s to a significant decline in both sources beginning in the 1980s.

Consequently, OUS campuses face problems related both to the cyclical nature of this growth and the lack of stable funding. Noted below are several central facilities issues that OUS is now facing.

A. Education and General-Systemwide (E&G) -- Summary of Needs

1. "Capital repair" refers to projects that may be predicted, based on the known life-cycle of major facilities sub-systems, such as roofs, electrical and plumbing equipment, exteriors and windows, and ventilation and heating equipment, etc. Ongoing, or preventive maintenance of facilities (i.e., repair and renovation of minor cost items) is supported by institutions through their operating budget.

"Deferred maintenance" is the term used to describe capital repair needs that have come due but have not been carried out (typically due to a lack of funds).

"Code and safety" projects refer to those building and subsystem upgrades required by the federal, state, or local government. Installation of fire sprinklers in basements of new or remodeled buildings is an example.

Work that has come due in the past decade, but has not been undertaken, is referred to as "deferred maintenance." In some cases, OUS has buildings dating from the early part of the century that will require total rehabilitation, at considerable expense, unless OUS decides to demolish them.

A total of about $390 million of deferred maintenance has been identified in an updated study, exclusive of student housing, parking structures, central campus utilities, circulation systems, and grounds. This represents about 18 percent of the current replacement value (CRV) of the main OUS campus facilities. Included within this number are 49 major buildings built before 1930 with a total of 2.5 million gsf.

Furthermore, near-term requirements for capital repair in selected buildings approach $100 million, or about five percent of the current replacement value of the OUS main facilities.

Proposed Approach

E&G-Systemwide. Once again, as in the last four biennia, in 1999-2001 the primary focus of the capital construction program must be placed on the E&G-Systemwide needs. In this biennium, however, staff recommend a single omnibus Systemwide request for state funds to cover academic modernization, capital repair, deferred maintenance, and code needs. The request is to fund 50 percent of the requirements via Article XI-G bonds and 50 percent via state General Funds. In addition, staff recommend seeking state funds to support the campuses to prepare a major "Facilities Outlook Report" for the OUS, based on new master plans for 2001-2003. In addition, staff requests Systemwide funds for small repair and renovation projects and land acquisition.

Clearly, the magnitude of the total set of needs is beyond the ability to fund in a single biennium, using normal strategies. The necessity to reduce the deferred maintenance backlog, long-term, and attempt to address near-term critical capital repair is keen. OUS staff will develop long-term funding proposals for the Board's consideration for inclusion in next biennium's capital budget.

B. E&G-Campus Projects -- Summary of Needs

In addition to enrollment, however, OUS campuses are working hard to increase regional access and are moving more aggressively to provide facilities that are better aligned with campus academic missions. New OUS strategic initiatives in engineering, biological sciences, and the performing arts require either new or completely rehabilitated facilities. Some $95 million of E&G-Campus Project requests are being put forward for Board consideration.

Proposed Approach

Given the primary focus, above, the 1999-2001 program for E&G-Campus Projects proposed for state funding ($95 million) is smaller than in recent years. Projects have been included based on their importance to OUS' strategic mission and to each campus' particular mission. Emphasis has been placed on projects driven by enrollment issues and accreditation, considering funding feasibility. To improve the quality of future projects, planning funds have been requested for a number of projects.

C. Student Residences and Dining Halls; Parking Facilities -- Summary of Needs

Proposed Approach

For auxiliary projects (self support operations), emphasize projects that respond to student needs, optimize revenue, generate gift funds, yet keep incremental debt (and resulting student costs) to manageable levels.

D. Student Facilities Supported by the Student Building Fee (SBF) ­ Summary of Needs

In the current biennium, 1997-1999, more than $18 million of new or renovated student facilities will be financed from this debt service reserve, typically through the repayment of 30-year bonds. Campus requests received for 1999-2001 total over $35 million; those received for the entire three-biennium period covered total $88 million. However, beginning in the 1999-2001 period through the year 2013, at current fee levels, financing capacity is limited to a total of approximately $7 million of construction activity.

Proposed Approach

This docket item describes a program that would finance $7 million of SBF projects in the new biennium, 1999-2001. Two campus projects would be supported directly, one for construction and the second for planning, with the balance of funding capacity directed on a selective basis to the remaining campuses for planning and small projects, as well as Systemwide code and safety needs.

To respond to the remaining needs, totaling $88 million for all three biennia, two strategic alternatives are presented for the Board's consideration. One would phase-in a small increase ($2.00/student/term) starting in 2000-01 for the academic year, and increasing by this amount each succeeding year. It would generate approximately $25 million of new financing capacity through 2004-05. The second alternative would seek a larger one-time increase, ($10.00/student/term) in 2001-02. This approach would provide $27 million of new financing capacity through 2004-05.

E. Campus Master Plans

F. Funding

PART II - PROPOSED 1999-2001 CAPITAL CONSTRUCTION PROGRAM

The 1999-2001 Capital Construction Program Summary, Exhibit 1 below, displays the total amount of funding requested for each the four major categories discussed above: E&G-Systemwide and E&G-Campus Projects, all of which are eligible for state funds; Auxiliaries, such as housing and parking, which rely on self-financing, self-liquidating bond funds; and SBF facilities, in which construction work is supported via bonds repaid by the student building fee. The portion of state funds requested for each category is also shown.

The detailed 1999-2001 Capital Construction Program request may be found in Supplement Table 2. In accordance with the DAS requirements, all E&G projects must be submitted in priority order. The two state funds-eligible categories of E&G-Systemwide funds and E&G-Campus Projects are thus combined on Supplement Table 2, followed in order by Auxiliaries and Student Building Fee projects. The bottom of the table displays the grand totals for all funds, for all categories, and displays the comparable information for the current biennium.

Total funding requested for 1999-2001 totals $231.4 million. This compares to $393.4 million requested in 1997-1999 and reflects the reduction in E&G-Campus specific requests, even though the Systemwide request was increased substantially.
Exhibit 1 - SUMMARY OF CAPITAL REQUESTS FOR 1999-2001, BY CATEGORY AND FUNDING

Category

Total Amount
(millions)

Percent
of Total

Total State Funds (millions)

Percent of State Funds
E&G-Systemwide $75.00 33% $55.00 46%
E&G-Campus Specific 95.65 42% 65.76 54%
Auxiliaries 53.72 23% 0 0
Student Bldg Fee 7.00 2% 0 0

TOTAL

$231.37

100% $120.76 100%


NOTE: The "Supplement to the Capital Construction Program" provided separately (on file in the Board's office) includes additional tables and project descriptions on the 1999-2001 program. Tables are provided to display the capital construction request by campus, by project type (new, remodel, acquisition, etc.), and by specific program being served (i.e., libraries, housing, student centers, etc.). Project descriptions offer information on the departments and units being supported, square feet involved, project justification, and total funding.

A. E&G-Systemwide Projects

Academic Modernization and Repair

As noted earlier, OUS recently completed a study to update the 1991 study of capital repair and deferred maintenance needs in the System. A summary of this new study, carried out by Pacific Partners Consulting Firm, is provided to Board members as a supplement to this docket item.

Study findings indicate there is a need for approximately $390 million of deferred maintenance funding. Capital repair needs on an annualized basis, that is, ignoring the actual cycle of capital repair, call for $34 million each year of funding. In addition, the $25 million of academic modernization requirements continues to be a high priority. To address these combined needs this biennium, the staff requests an omnibus Systemwide item,"Academic Modernization and Repair," be included at a level double the previous amount solely for capital repair and maintenance. By combining needs, it will be possible to carry out projects that address academic modernization and, in so doing, carry out capital repair, code, or deferred maintenance issues as well. Staff believes this approach will enable the campuses to address projects that involve combinations of needs, while retaining flexibility to focus on individual areas of concern.

Other Systemwide Needs

$5 million in state funds and $12 million in Article XI-F(1) bonds and other revenues for campus master plans, small capital projects and land and buildings acquisition

B. E&G Projects

Math and Sciences

A total of $59 million is requested, of which $42.5 million (72 percent) is state funds and the remaining gift-funded. New buildings would be sought for EOU's Regional Agricultural Health and Life Sciences Building, and UO's Integrative Information Science Complex. Remodels and rehabilitation of laboratory buildings at OSU (for Pharmacy, Rangeland Resources, and Nutrition & Food Management programs), and OIT (Cornett Hall for Physics and Sciences Labs). Planning funds would be sought for SOU's Life Sciences Addition for Biology, Nursing, and Math, and for OSU's Linus Pauling Institute (gift-funded).

Arts and Culture

A total of $14.9 million is requested, of which about $8 million is in state funds and the remaining from gifts or grants. SOU would use the funds for a remodel and infill-addition for its Drama Lab. The most substantial building would be the UO Museum of Art, half funded by gifts, which would build an addition and carry out alterations. Planning funds would be available to PSU for the rehabilitation of the obsolete building housing its School of Fine and Performing Arts and the UO would receive funds to plan a new addition and alteration to its School of Music facilities, largely gift-funded.

Libraries

A total of $10.85 million is requested, all requiring state funds. This would complete the two-biennia funding strategy for WOU's new library. It would also remodel PSU's library for computer integration and provide planning funds for a library addition at SOU.

Social Sciences

A total of $8.3 million is requested, of which $3.1 million is state funds and the remainder is gifts or grants. A new small building would be sought for the UO Oregon State Museum of Anthropology, and an addition and alteration for the UO Cognitive and Social Sciences. UO also would remodel a leased facility to house a diverse range of programs for Continuing Education and other units.

Other

Additional needs are for $2 million in state funds to pay an assessment on PSU capital construction projects required by Portland municipal ordinance.

Student Administrative Services

A total of $295,000 of state planning funds would go to WOU to begin planning for the reconfiguration of the existing library building to house student support services and some classroom and lab uses.

C. Auxiliary Projects

Athletics

A total of $24.8 million (46 percent of Auxiliary projects) is requested, almost all of which is entirely gift-funded. Two new projects include a gift-funded addition to OSU's Gill Coliseum for a gymnasium and funding for Phase II of UO's Recreation and Fitness Center (largely for the tennis program, funded by a Board-approved special UO recreation center fee). Rehabilitation of space for the OSU wrestling program, OSU's Softball Stadium relocation, PSU's Stott Center, and replacement of turf at UO's Autzen Stadium are also requested.

Student Residences

A total of $15.9 million of projects (30 percent of all Auxiliary projects) was identified by the campuses, all to be financed by the issuance of Article XI-F(1) bonds. New facilities would include a $2 million increment to the 1995-1997 OSU Family Student Housing (originally $8.4 million), to cover inflation and costs associated with improved design. Rehabilitation and code projects would be carried out at OIT, OSU, PSU, and UO.

Parking

A total of $6.1 million (11 percent) is requested for a single project, the seismic retrofit and addition at PSU's Parking Structure #3, an Article XI-F(1) bond financed project.

Other

A total of $5.6 million (ten percent) is requested for three unusual projects that belong to the category of Auxiliaries. SOU is pursuing the issuance of Article XI-F(1) bonds to purchase and lease the former Museum of Natural History in Ashland, to house its Environmental Science Partnership program, an outreach/community project. PSU is seeking expenditure limitation for a gift-funded project that would move onto the PSU campus an historic house once belonging to Simon Benson and rehabilitate it for PSU's use. WOU requests authorization to use Article XI-F(1) bonds to build an addition to the existing Old Library, for a forensic lab, to be leased by the State Police co-located on the campus.

Student Facilities

Auxiliary Contribution -- $1.1 million is noted here for projects involving code improvements at OIT's College Union, and remodeling projects at SOU's Stevenson Union and UO's Child Care facility.

Bookstore

A small $159,000 project is planned for Stevenson Union at SOU.

D. Student Building Fee Projects

Under this situation, after discussion with the Administrative Council, the Board is asked to consider the following approaches:

Scenario 1. Fund 1999-2001 at a level of $7 million (see below). Consider a $2.00/student/term increase beginning in 2000-01, and increase the fee by $2.00 each term in each succeeding year through 2004-05. This approach would generate sufficient fee income to finance approximately $25 million of projects through 2004-05.

Scenario 2. Maintain existing SBF for 1999-2001. Raise the SBF one time by $10.00/student/term in 2001-02. This would generate funds to finance approximately $27 million of projects through 2004-05.

For the 1999-2001 biennium, the OUS program would include the following:

WOU -- Apply $2.86 million to support the Werner College Remodel, Phase III, as it is a relatively small project that will complete a major upgrade, which has substantial code-related issues. The project is driven by student enrollment growth, code corrections, and building rehabilitation. If approved, WOU would not be eligible for another SBF project under the current approach until other campuses had received their proportionate due.

PSU's Smith Center Phase II project -- Provide $1 million in planning funds, and place it first in the queue for 2001-2003.

Retain $1.0 million centrally for emergency needs until 2001-2003.

Apply the remaining $2.14 million among the remaining campuses, directed either to planning or discrete small projects.

As part of the master planning update for the campuses, each campus would re-examine the forecast of needs for student facilities. OUS would examine the calculation of the FTE which determines the Student Building Fee funding levels, and examine the desirability and feasibility of securing an additional funding strategy for Student Building Fee facilities.

E. Bonds

Article XI-G bonds may be issued to support E&G projects as long as they are matched equally by the General Fund (including Lottery Funds), or gift funds placed in a legislatively-approved Donation Account. Debt service on Article XI-G bonds is paid from the state General Fund.

Projects for which bonds are requested for 1999-2001 are shown on Supplement D, "Projects Proposed for 1999-2001 Bond Bill for Higher Education." The Article XI-G bonds and Article XI-F(1) bonds (excluding carry over) total $104.3 million, of which $59.6 million are for Article XI-G bonds and $44.7 million are for Article XI-F(1) bonds. (To this sum must be added, at the time of issuance, two percent for Article XI-F(1) bond issuance costs; Article XI-G bonds may not be increased by two percent.)

In addition, Supplement D shows projects for which staff request bond reauthorization. The list includes projects approved either in 1995-1997 or in 1997-1999 and which must be reauthorized and included in the request for the 1999-2001 Bond Bill for Higher Education. Reauthorization is required due to the two-year time limit placed by the Constitution between the date of legislative authorization and the date sold. In many cases, two years is insufficient for a campus to complete all fundraising, design, site preparation, and construction contract activity.

Reauthorization of two projects from the 1995-1997 capital program is requested and 22 projects from 1997-1999, including three small Systemwide projects, for a total of $78.9 million. Of this amount, $7.9 million is for Article XI-G bonds, for four projects.

Supplement Table 2 presents information on those Article XI-G bond-funded projects matched by General Fund. There are three sets of projects for which OUS staff request authorization:

The following two exhibits portray estimated annual debt service requirements for Article XI-F(1) bonds by campus and Systemwide (Exhibit 2) and total bonded debt outstanding as of Fiscal Year End 1998, by revenue source (Exhibit 3):

Exhibit 2
1999-2001 Auxiliary Services Projects

(dollars in millions)
Institution Article XI-F(1) Bonds Estimated Annual Debt Service*
OIT $ 0.95 $0.07
OSU 12.07 0.92
PSU 9.05 0.69
SOU 3.37 0.26
UO 2.92 0.22
WOU 4.25 0.32
Systemwide 3.14 0.24
TOTAL DEBT OUTSTANDING $35.75 $2.72

* Assumes 30 year repayment term at 6.5 percent interest.
Includes $7 million of student facilities financed through the student building fee debt service reserve.

Exhibit 3
Article XI-F(1) Bonded Debt Outstanding
as of June 30, 1998*

(dollars in millions)

Project

Bonds Outstanding Annual
Debt Service
Revenue Available Dedicated Revenue Source
Consolidated Dorms $ 39.2 $3.9 $39.2 Res & Dining Hall
Independent Dorms 7.7 0.5 A portion of above revenue Res & Dining Hall
Parking 14.9 1.5 5.1 Parking Fees
Auxiliary Programs 109.5 7.6 33.6 Housing rental income, lease payments, user fees, transfer from E&G
Student Building Fee Program 54.8 6.7 7.2 Student Building Fees
TOTAL DEBT OUTSTANDING $226.1 $20.2

* Excludes OHSU debt outstanding of $44.6 million. Debt service is paid by OHSU per OUS/OHSU Debt Service Agreement.

The next two exhibits portray Article XI-G bonded debt trends from 1991 through 1999 (Exhibit 4) as well as actual and projected annual debt service through 2005 (Exhibit 5), inclusive of the proposed projects for the 1999-2001 biennium:

Exhibit 4
Article XI-G Bonded Debt
Historical Trends

(dollars in millions)

Biennial E&G
All Sources

Debt Service
Percent of E&G Total

General Fund
E&G

Debt Service Percent E&G General Fund
1991-1993 $ 818 1.55% $515 2.46%
1993-1995 866 1.47% 482 2.64%
1995-1997 980 1.67% 431 3.79%
1997-1999 1,038 1.83% 470 3.97%

E&G = Education & General

Exhibit 5
Article XI-G Bonded Debt Outstanding
Actual and Projected

(dollars in millions)
Bonds
Outstanding
Annual
Debt Service
Biennial
Debt Service

1997-1998

$ 65.1 $8.5 $18.4
1998-1999 73.6 9.9
1999-2000 79.5 9.9 20.3
2000-2001 87.6 10.4
2001-2002 135.8 13.6 27.2
2002-2003 130.0 13.6
2003-2004 124.5 13.6 25.4
2004-2005 118.9 11.8


F. Certificates of Participation

Equipment and systems acquisition is budgeted in the operating budget, as is the debt service on any COPs that actually are issued. (An exception exists for nonlimited funds. In 1997-1999, only $100,000 of COP funding was requested for equipment or systems acquisition associated with nonlimited funds such as housing or internal service funds.)

For 1999-2001, COPs are requested for the following projects and equipment:



Campus


Project Name

Net Cash
Proceeds
OUS

Instructional Technology

$ 5,000,000
UO

Cashiering System Upgrade

100,000
UO

BAO Workstation Replacement

100,000
UO

Document Imaging

150,000
UO

Campus Inventory (Bar Coding)

250,000
UO

Campus Workstation Upgrade to GUI

250,000
UO

Campus Infrastructure/Mainframe Upgrade

250,000
PSU

Classroom Upgrades

1,500,000
PSU Technology Upgrades (Instruction, Research, & Administration) 2,500,000
SOU

Campuswide Card System

100,000
SOU

Telecommunications Expansion Cabinet & Upgrades

150,000
SOU

FIS Web Server Enhancements & Equipment Replacement

100,000
SOU

EdNet 2 Distance Learning Infrastructure Replacement

200,000
SOU

Document Imaging System

400,000
SOU

Network Improvements

500,000
TOTAL $11,550,000


If these proposals are approved by the Board, DAS, and the legislative assembly, OUS will be able to issue COPs for these projects during 1999-2001.

PART III - PROPOSED SIX-YEAR (1999-2005) CAPITAL CONSTRUCTION PROGRAM

Projects for the years 2001-2003 and 2003-2005 are not reviewed extensively, nor inflated to future dollars. Nor do these projections

reveal likely substantially increased funding required for capital repair and deferred maintenance, as discussed. Supplement Tables 3 and 4 provide, by campus, details on the requests.

The six-year capital construction program totals for E&G, Auxiliary and Student Building Fee projects are summarized below. Detailed tables are included herein.

Summary Proposed Capital Program - 1999-2005
by Category and Total Funds

(In Millions)

CATEGORY 1999-2001 2001-03 2003-05 TOTAL
E&G Systemwide $75.00 $71.50 $71.50 $218.00
E&G Campus Specific 95.65 272.46 205.40 573.51
Auxiliaries 53.72 59.05 52.25 165.02
Student Bldg Fee 7.00 41.65 21.40 70.05
TOTAL $231.37 $444.66 $350.55 $1,026.58

PART IV - STAFF RECOMMENDATION TO THE BOARD

Staff recommended that the Board authorize staff to prepare and submit to the Department of Administrative Services a proposed 1999-2005 Capital Construction Program Budget in accordance with this docket item and the supplemental materials (on file on the Board's office). Further, it was recommended that staff be authorized by the Board to apply for the necessary grants and seek the necessary bonding authority and Certificate of Participation authorizations to effect the projects and purchase the equipment and systems described in this docket item for the 1999-2001 biennium.

Board Discussion and Action

Associate Vice Chancellor Marilyn Lanier (formerly Foute) reviewed the capital budget request. She highlighted for the Board that the budget request is a reduction of more than 40 percent compared to the 1997-99 current biennial request. "This is for several reasons," she continued. "One of the major ones is that we asked campuses to limit the number of submissions through campus specific projects, especially those involving state funds. Historically we have come back with zero or very little funding from the state. We are trying a new strategy this time.

"A major change in the strategy, in addition to the one I just mentioned, is that we are recommending that the number one Board project Systemwide in Education and General programs be an omnibus request for $50 million, half of which will be General Fund, and half of which would be for G Bonds to cover a four-part program: academic modernization, the capital repair programs, deferred maintenance programs, and code and safety projects, which are increasingly consuming an important part of our capital repair and deferred maintenance budget."

Ms. Lanier emphasized that it is important for staff to work with the Board to come up with a solution that would meet some of the unmet demands. "We have approximately $88 million worth of high priority student facilities recommended for the three biennium," she concluded.

Ms. McAllister asked if the total amount of deferred maintenance has been building over the past several years or if inroads had been made in the accumulated amount.

Ms. Lanier responded that has been building over the years for several reasons. "One is that the System has been estimating the deferred maintenance requirements over the past biennium based on the 1991 baseline study that was done. It was done primarily on an OSU study and then extrapolated to other campuses. Then we have made adjustments based on certain calculations over those biennia and assumed that those requirements were in the range of $2 million or so, but reserving some skepticism about them. In fact, what this study shows is that it is quite a bit higher."

Vice Chancellor Anslow added that one of the points in the new operating budget model is the ability to begin to put incremental funds into maintenance and, therefore, avoid some of the high costs of things like total roof repairs. "If we stay on course all the way along, we would intend that a portion of the incremental funds of the new model would be dedicated to ongoing maintenance. You still have the problem of the deferred maintenance that already exists and the only way that we can deal with that is to increase the capital repair budget," he said.

Mr. Lussier moved and Ms. Wustenberg seconded approval of the staff recommendation. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

ACADEMIC YEAR FEE BOOK 1998-99, TUITION & OTHER FEE POLICIES

Staff Report to the Board

The Academic Year Fee Book contains the proposed fees and associated policies relating to all mandatory charges required of students enrolled within the regular, on-campus, academic year programs of the Oregon University System. The Chancellor recommends the Board adopt these fees as submitted. Each fee proposal has been tested against a set of criteria to evaluate the appropriateness of any fee increase. These criteria included:

How does the fee increase relate to inflationary and obligatory cost requirements?

Have there been mandatory cost increases imposed on a given fee supported service, such as that imposed by the changes in state or federal wage laws?

Is it important to student life to sustain support to a given operation?

Is the function or service sufficiently important to student life or the operation of the institution to warrant the offset of revenue losses caused by declining enrollments?

Has the fee proposal been endorsed by the institution's students, either through its student government, student committee structure, or student referendum?

The staff believes that each proposed fee meets this test and warrants the favorable action of the Board.

Tuition represents the mandatory enrollment fees assessed all students in the regular academic year program of OUS institutions. Tuition is comprised of the following separate fees: Instruction, Resource, Building, Incidental, and Health Service fees. It should be noted that certain fee increases may be expected and are consistent with the Board's budget submission and the Governor's and legislature's recommendations. There has been considerable publicity about the legislature's action to maintain the instruction fee at the 1996 rate for resident undergraduate students only. The instruction fee is only one of several components that makes up the total tuition. The revenue generated by each element of the tuition and fee schedule is dedicated to a specific purpose, independent of the other components.

Comparisons of tuition and fee charges 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.

Instruction Fees. Instruction fees for all institutions within OUS are increasing at the same rates. As a result of 1997 legislative action on the 1997-1999 budget, instruction fees for resident undergraduate students at all institutions remain at the 1996-97 rates. The 1998-99 graduate instruction fees and the nonresident undergraduate instruction fees are increasing by three percent over 1997 fees at all institutions.

Instruction fees, shown on Schedule 2, generate revenues that apply toward support of the Education and General Services component of the Department of Higher Education expenditure budget. Instruction fees are a part of the biennial budget funding package proposed by the Board and addressed by the Governor and legislature.

Fees are assessed within undergraduate and graduate fee structures by resident and nonresident student classifications. The residency classification applies to all admitted students. Non-admitted 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 nine and 16. The fees for eight credit hours or less are prorated for the hours enrolled. If students take credit hours above the plateau they are assessed an additional amount for each hour taken.

Building Fee. The building fee, summarized on Schedule 3, is the same for all institutions. The rate remains at $25 per term per student. This fee 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. It is historically set by the legislature through ORS 351.170. The Board was initially presented with a proposal to increase this fee in July 1996 with the approval of the 1997-1999 Capital Construction Budget Request. The 1997 Legislature approved the Board's request to authorize an increase in the student building fee to $25. A pro rata fee is assessed on part-time students.

Incidental Fee. Incidental fee changes are described below for each institution and summarized on Schedule 3. This fee recommendation is, for the most part, initially made by student committees in accordance with a Board-approved incidental fee policy (OAR 580-010-0090) on each campus. In some instances, the student committee recommendations are supported by general campus student referenda. The funds generated by this fee are, as specified by the OAR, to be used for "student union activities, educational, cultural, and student government activities, and athletic activities." The president of each institution reviews the student committee recommendations. Once satisfied with the proposal the president submits the recommendation to the Chancellor, who in turn, after a review, submits the proposal to the Board.

Health Service Fee. Institution recommendations for the health service fee are described for each institution below and summarized in Schedule 3. This fee is used to support the student health services of each institution which are operated as auxiliary services. Generally, rate increases reflect the institutions' efforts to maintain the self-support nature of these services. Optional health insurance policies are also made available by some institutions.

Resource Fee. Resource fee changes recommended by the institutions are described below and shown on Schedule 3. Resource fees provide funds for specific programs to assist with faculty salaries, resource materials, equipment, and specialized services. The fees are assessed only to targeted student populations 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. Students enrolled under the part-time student fee policy are subject to the resource fees appropriate to specific courses taken. The technology resource fee is assessed to all students. 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.

For those students on Board-approved fee remission programs, resource fees will be covered by the fee remission.

All institutions assess some set of resource fees. Some are increasing 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.

Total Tuition and Fees. The total of tuition and fee rates for each institution compared to 1997-98 is summarized on Schedule 4. This reflects the sum of instruction, building, incidental, health services, and technology/resource fees and, in the case of the UO, the Recreation/Fitness Center Fee.

Note that the legislature increased state funds by an amount that offset an anticipated increase in resident undergraduate instruction fees only. These incremental state funds do not offset the legislatively approved increase in the building fees, nor the increases in incidental, health services, or resource fees. To demonstrate what the tuition increase would have been had the resident undergraduate instruction fee not been frozen, Schedule 5 compares the 1998-99 tuition with and without a three percent increase to the 1997-98 instruction fee totals.

The following are explanations for each institution-generated fee recommendation. Each of these proposals has been reviewed by the Chancellor's staff. Staff believe each proposal has met the criteria outlined at the beginning of this docket item.

Eastern Oregon University

EOU proposed no increase in its incidental fees of $179 per term.

EOU health service fee is increasing by 27.5 percent to $65 per term to cover the cost of a second counselor. The position had previously been funded by a grant which has not been renewed. This fee increase, the first since 1993, is endorsed by the Student Senate and the University's Student Affairs Committee.

EOU proposed no increases in its technology fee of $50 per term, nor in its one-time matriculation fee of $50 for new students.

Oregon Institute of Technology

OIT proposed no increase in any of its fees of incidental, health service, and technology fees.

Oregon State University

OSU incidental fees are increasing by 8.3 percent to $130 per term. This increase is the result of an increase in minimum wage requirements, new student activity programs, a new child care program, increased access to athletic events, and an emergency loan program for international students.

OSU health service fee is increasing 8.7 percent to $75 per term, to fund the addition of a sexual assault counselor and a learning skills specialist to the counseling staff.

OSU is increasing the Pharmacy resource fee by three percent to $1,040 per term per student. No increase was proposed for the other resource fees of Master of Business Administration, Engineering programs, and the technology fees. The one-time matriculation fee is proposed to increase 50 percent to $75, assessed to all new students.

Portland State University

PSU incidental fees are increasing by 16 percent to $116 per term. The PSU Student Fee Committee wanted to increase the scope of educational activities available, having felt that the fee has not kept pace with inflation, and student groups have not expanded with the growth in the PSU student body. Increased commitments were made by the student committee and endorsed by two referenda approved by the student body for expanded associated student activities, child care functions, and the Oregon Student Public Interest Research Group support. The student fee committee also set aside matching reserves to encourage the University and foundation to increase funding commitments for tutorial services and child care assistance.

PSU health services fee is increasing by 9.3 percent to $59 per term. The reasons for the $5 increase include: inflationary increases on medical supplies, salary increases for health service employees, and increased operating hours of the student health center. The center is planning to expand its operating hours by one hour a day to 6 p.m. Monday - Friday.

PSU proposed to increase each of its resource fees. The College of Business Administration master's program fee is increasing 20 percent to $12 per credit hour, up to $120; the Engineering program fee is increasing 30 percent to $13 per credit hour, up to $130. These increases will improve enrollment management and student services in these two programs. The technology fee is increasing 14.3 percent for undergraduates to $48 per term and ten percent for graduates to $49.50 per term.

Southern Oregon University

SOU incidental fees are decreasing by 3.5 percent to $110.50 per term. The student incidental fee committee determined that due to current balances and enrollment growth the current services could be sustained with a reduced fee.

SOU health service fee is increasing by 3.1 percent to $66.50 per term. This increase is the result of increased labor costs, and a shift of a portion of the counseling services to the health service fund.

SOU proposed no increase in its Master's of Business Administration (MBA) resource fee of $100 per term for residents, $150 for nonresidents. The University proposes a new Master of Management resource fee equal to that of the MBA fee of $100 per term for residents, $150 for nonresidents. The technology fee will continue to have a maximum assessment of $24 per term; however, the student/faculty technology committee recommended the minimum fee be $10 for the first credit hour and a $2 increment up to $24. Southern proposes a new matriculation fee for new and transfer students of a one-time $25 fee.

University of Oregon

UO incidental fees are increasing by 6.8 percent to $157.75 per term. At the Spring 1998 elections, student incidental fee referenda were approved to indicate the support of increasing incidental fees. These included: a one-year increase of $7.35 per term for equipment within the student center, ongoing support of $1.11 for a designated driver program, and $.63 for a student computing center operations. In addition, the student incidental fee committee supported funding an increase in the local transit service rate for students and other base program increases. A partial offset to these increases came through program decreases endorsed by student body referendum.

UO health service fee is increasing by 1.3 percent to $81 per term to finance its inflationary increase requirements.

UO proposed to restructure the College of Business Administration resource fee and three new resource fees. A new $100 per term resource fee will be assessed all undergraduate business majors. This fee will support a computer lab, special undergraduate advisor, and specialized tutoring services. In addition, the current rates of $100 per term for residents and $250 per term for nonresidents will both be increased to $500 per term. This fee supplements the graduate program to support career services counseling, technology services, and a new MBA program working directly with Oregon businesses. A new $30 per term resource fee will be assessed all majors in Architecture and Landscape Architecture to provide funding of improvements to individual student work stations, studios, and computing capabilities.

A new matriculation resource fee will be assessed all students with an additional fee assessed to new students only. The base fee will be $15 per term to be assessed in 1998-99 and 1999-2000. In addition, new undergraduates will be assessed a one-time fee of $100; undergraduates participating in the University's orientation program will be assessed an additional $50. Graduate students will be assessed a one-time fee of $50. This matriculation fee will replace several other administrative fees for services including: university and academic program orientation, late registration fees, transcripts fees, course and program enrollment change fees, degree application fees, and re-enrollment fees. The technology fee is increasing 30 percent to $65 per term for all students. This fee for enhanced instructional technology has not been increased in four years. Half the increase will be to maintain services, the remainder to expand high priority services as requested.

The Law School proposed no increase in its resource fee of $1,950 per semester for residents and nonresidents.

UO will continue assessing the Recreation/Fitness Center Fee, initiated in 1997-98, as shown on Schedule 3 at $15.25 per term. In 1995, the student body at the UO approved a referendum to recommend this fee be assessed for 30 years beginning in 1997-98. This fee was proposed as part of a financing package for a major renovation and expansion of the recreation and fitness facilities that also includes the use of building fees and gifts. In the July 1996 presentation to the Board on the 1997-1999 Capital Construction Budget, this fee was identified as part of the financing package to help retire XI F (1) Bonds. In addition, an increase in the incidental fee was approved of $7.75 per term for operations.

Western Oregon University

WOU incidental fees are increasing by 13.3 percent to $119 per term. This increase was initiated by the student incidental fee committee and endorsed by the student senate. In addition to inflationary increases in current programs the funds will expand university center operations, support athletic membership in NAIA and NCAA, expand programming in student leadership and student activities, child care availability, and student media.

WOU health service fee is increasing 1.8 percent to $174 to offset inflation.

WOU proposed no increases in its technology fee of $2 per credit with a maximum of $24 per term for undergraduates and $18 per term for graduates.

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. Proposed changes to these policies are as follows:

The definition of the term "Tuition" was modified to refer only to "Instruction Fee." Other Mandatory Enrollment Fees, historically within the definition of Tuition, will be referred to as "Fees."

OIT's fee for courses covered by the Memorandum of Understanding with the Klamath Community College Service District are being increased by $1 per credit hour to $36 per credit hour. This is in line with rates charged by the local Community College Service District.

SOU's fee for courses covered by the Memorandum of Understanding with Rogue Community College are being increased by $4 per credit hour to $40 per credit hour. This is in line with rates charged by the local community college.

A federal ruling, prohibiting race-based student aid programs, has required restructuring certain fee remission programs. The Oregon University System Educational Diversity Initiative, approved by the Board October 17, 1997, responds to that ruling. This fee remission program combines the Minority Achievement Scholarship Program for First-Time Freshmen, the Junior Underrepresented Minorities Achievement Scholarship Program, and the Oregon Laurels program. The new program is open to all students, resident or nonresident, undergraduate or graduate. Students enrolled under the former programs will continue under those program guidelines. All new participants will be enrolled under the new initiative program. The original three programs will be phased out by 2002-03.

The policies governing the Cooperating Supervisors of Student Teachers are revised to allow cooperating school districts more flexibility in use of the enrollment privileges earned through the student teacher program. The new policies provide the school district more latitude in which its teachers are eligible to take courses at OUS institutions.

The new OUS Interinstitutional Student Exchange Program was adopted by the Board February 20, 1998, and is added to the academic year fee policy book. This program allows undergraduate students regularly enrolled in one OUS institution to pursue up to one complete academic year of study at another institution without requiring a formal transfer.

In the 1997 Legislature, Senate Bill 504 provided funding a set of programs relating to Engineering and Computer Sciences education. With this funding, the name of the Oregon Center for Advanced Technology Education (OCATE) is being changed to the Oregon College of Engineering and Computer Science (OCECS). The policies used for OCATE are still applicable for most of the ongoing programs of the OCECS, except for the Oregon Master of Software Engineering. The per credit hour tuition assessed by the College is increasing three percent to $198, and exempts resource fees from being assessed.

The Oregon Master of Software Engineering (OMSE) program is a subdivision of the Oregon College of Engineering and Computer Science. OMSE is a joint program of the computer science departments of OSU, PSU, UO, and the Oregon Graduate Institute (OGI). Students who apply for admission to the program must also apply for admission to one of the four sponsoring institutions. Policies are included for this program that address the expectation that it will eventually become self-supporting. This includes setting the tuition at $475 per credit hour.

The Master of International Management program is administered through the Joint Professional Schools of Business. The tuition is $16,900 per year, plus a $350 per year technology fee. This program is intended to be self-supporting by 2000-01.

Residence Hall and Food Service Charges. 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 1998-99, institution administrators estimated residence hall occupancy in relation to enrollment projections and present occupancy patterns.

Recommended changes for 1998-99 in room and board rates are reflected in the examples given in Schedule 6. These rates are only examples, since each institution offers various room and board combinations. The most basic room and board rates will increase between five 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.

Only one housing policy change is proposed. Students who move from an institution residence hall before their contract period is complete, but remain enrolled at an institution, are assessed a daily rate for the days remaining on their contract. The maximum rate students may be assessed is being increased from $2 to $5 per day.

Report of Public Hearing on Academic Year Fee Book

Summary of Testimony Received

The public hearing on the 1998-99 Academic Year Fee Book was conducted on Friday, June 5, 1998, from 10 a.m. to 11 a.m., in Room 121 of Susan Campbell Hall, on the UO campus. No one attended the public hearing nor did anyone submit written testimony.

Staff Recommendation to the Board

Staff recommended that the Board amend OAR 580-40-040 as follows:

(Underlined material is added; brackets denote deletion.)

OAR 580-040-0040 Academic Year Fee Book
The document entitled Academic Year Fee Book, dated July 16, 1998 [July 18, 1997], 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 docket item.

Board Discussion and Action

Vice Chancellor Anslow briefly highlighted aspects of the Fee Book and suggested that it might be more efficient to respond to questions from Board members.

Mr. Koch began by expressing concerns with the differential tuition or resource fee and how the Board has debated the philosophy of charging students different rates of tuition for different programs.

Mr. Imeson responded that it was a topic of discussion at the Committee on Budget and Finance but that the Committee recognized that there is differential tuition across the campuses and that it will probably remain that way.

Mr. Koch continued his line of questioning, in particular to differential tuition related to specific programs at the UO. President Frohnmayer and Vice President Moseley provided clarification on the process used to establish the fees and why there were differential costs. Provost Moseley explained, "I appreciate your concern and your bringing up the issue of where the Business School is in the matrix of other things. On the other hand, each of the fees that we have put forward has been extensively processed with the appropriate students. We would not be bringing them here if we did not feel they had general support from the students that are affected."

Mr. Imeson and Ms. McAllister underscored that there were always public hearings on the proposed Fee Book and that even Board members receive notice of them. Ms. McAllister added that "there hasn't been attendance or written testimony from students that does speak to the work that goes into this by the campuses."

Mr. Koch responded, "I want to clarify something. I understand freshmen and sophomores are not paying this fee, it is only declared majors in the program. The comment that I made was in reference to a freshman or sophomore choosing a major, determining what program they wanted to go into, and going a route away from business, which perhaps they wanted, because they recognized the increased debt load it was going to bring to them."

Mr. Imeson reminded the Board that there had been a lot of discussion about resource fees and encouraged moving to a vote on the item since there were members of the COCC Board waiting for the conclusion of the Board meeting. Mr. Koch responded by saying, "We have in next year's budget four pages dedicated to fee increases. If this is not a rubber stamp Board and we truly want to look at each of these fee increases and make an informed judgment about it, we should not be concerned about trying to pack it into a small period of time, but rather have an opportunity for a full and honest dialogue." President Imeson indicated that there had been ample opportunity for review and discussion prior to the meeting.

Ms. Van Patten added that there had been misunderstanding on the part of the Incidental Fee Committee at the UO regarding whether the technology fee would sunset or not. Provost Moseley read from a letter he wrote to Chancellor Cox, "If we do receive an adequate level of funding for instructional technology in the upcoming legislative session, we intend to reduce this fee back to the level of $50 per term in 1999-2000." Chancellor Cox added that his understanding was, as Provost Moseley suggested, that if the funding in the new budget is adequate, it will be rolled back. "I assume that means a conversation among the provost, president, and me once we know the budget. And we are all committed to doing just that," said Chancellor Cox.

Dr. Aschkenasy moved and Ms. Wustenberg seconded the motion to approve the staff recommendation.

Mr. Koch moved to amend the staff recommendation, to set the technology fee increase for the UO as a one year sunset fee, with the sunset to expire after one year. (The record indicates that there was no second to the motion.) In discussion of the amendment, President Frohnmayer indicated that he had not objection to proceeding in the manner suggested if it was a matter of giving the Board adequate or additional notice. Dr. Aschkenasy indicated his objections to the amendment because it "repudiates the honor of these two gentlemen (president and provost) over $15."

The following voted in favor of the amendment to the main motion: Directors Koch and Van Patten. Those voting no: Directors Aschkenasy, Christopher, Lussier, McAllister, Puentes, Willis, Wustenberg, and Imeson. Motion failed.

Mr. Koch moved and Ms. Van Patten seconded to amend the staff recommendation by removing the proposed increase at the UO for the resource fee for the graduate, non-resident, and resident increases only. Those voting in favor of the amendment: Directors Koch and Van Patten. Those voting no: Directors Aschkenasy, Christopher, Lussier, McAllister, Puentes, Willis, Wustenberg, and Imeson. Motion failed.

Mr. Koch moved and Ms. Van Patten seconded a motion to amend the staff recommendation by removing all increases in matriculation fees across the board.

Provost Moseley commented that the matriculation fee that the UO was proposing would not cost students any additional money. "It removes a total of all the fees and students simply pay one time. This is not an increase in net fees."

Mr. Koch continued by asking if this one-time $100 matriculation fee was going to be charged to incoming students and an additional $15 per term be charged for the next two years to all existing students. Provost Moseley indicated it would not. Continuing, Mr. Koch said, "I apologize to the Board for going this route. I wanted to have a dialogue about some of these fees. I don't feel like that option has been given to me. I was told by Board members when I brought this up that I was going to have some of these questions, that my perspective would be appreciated, and that my questions would be appreciated. The direction that this Board has taken in discussion, in interrupting me and shutting me down in trying to ask those questions, has not allowed me, in my opinion, to raise some of those honest questions for dialogue, and so I realize that by making all these motions, I'm perhaps being a nuisance, at my very first Board meeting. But I feel like this is the choice I have been given."

Those voting in favor of the amendment to the main motion were: Directors Koch and Van Patten. Those voting no: Directors Aschkenasy, Christopher, Lussier, McAllister, Puentes, Willis, Wustenberg, and Imeson. Motion failed.

Mr. Koch moved and Ms. Van Patten seconded a motion to amend the staff recommendation to not approve the increase in the maximum rate students may be assessed per day for moving out or reaching their resident hall contract.

Mr. Koch indicated that this was a serious issue for him since many students who go to the universities are living on their own for the first time and have little or no experience in having ever signed a contract. "I don't imagine this is one (fee) that was extensively researched with the student body. I want to have some kind of dialogue on this if that is possible."

President Frohnmayer assured the Board that he was always available to be consulted ahead of time if there are questions about the advisability of any measure put before the Board and added, "I regret that we have not been given that opportunity until this time. We are talking here about a penalty for a breech of a contract. That is to say, a person who is not fulfilling his/her obligation. And if that contract is broken, the cost of providing services falls upon the other students in the dormitory sooner or later. This is not a free lunch, and so the cost of running the dormitories has to be calculated on the basis of some prediction of what occupancy rates are going to be."

Mr. Lussier asked for clarification as to whether Mr. Koch was objecting to the increase or the fee itself. Mr. Koch indicated that the issue in terms of residence hall policy or dormitory policy could be looked into deeper and perhaps another method other than a $2 fee could be discussed.

Those voting in favor of the motion to amend the staff recommendation: Directors Koch and Van Patten. Those voting no: Directors Aschkenasy, Christopher, Lussier, McAllister, Puentes, Willis, Wustenberg, and Imeson. Motion failed.

Those voting in favor of the original motion: Directors Aschkenasy, Christopher, Lussier, McAllister, Puentes, Willis, Wustenberg, and Imeson. Those voting no: Directors Koch and Van Patten.

At 4:05 p.m., President Imeson adjourned the Board meeting until 8:00 a.m. the following day, Friday, July 17.

Schedule 1 (A)
Public Colleges/Universities in the West

Annual Tuition Rates in Representative Institutions - 1998-99*
In Descending Order of Resident Undergraduate 1998-99 Rate


Institutions

Year
Resid.
U/Grad
Nonres. U/Grad Res.
Grad.
Nonres. Grad.
Western Oregon University 1997-98 3,099 9,117 4,809 8,619
1998-99 3,198 9,738 5,169 9,210
% Change 3.2% 6.8% 7.5% 6.9%
West. Washington Univ. 1997-98 2,613 8,796 4,065 12,000
1998-99 2,867 9,560 4,445 13,025
% Change 9.7% 8.7% 9.3% 8.5%
Eastern Montana College 1997-98 2,517 6,976 2,899 7,356
1998-99 2,809 7,569 3,215 7,975
% Change 11.6% 8.5% 10.9% 8.4%
Boise State Univ. 1997-98 2,294 8,174 2,816 8,696
1998-99 2,472 8,352 3,020 8,900
% Change 7.8% 2.2% 7.2% 2.3%
West. St. Coll. Colorado 1997-98 2,152 7,333 -- --
1998-99 2,173 7,553 -- --
% Change 1.0% 3.0% -- --
Chico State Univ. 1997-98 2,088 7,992 2,071 6,007
1998-99 2,030 7,934 2,108 6,536
% Change -2.8% -0.7% 1.8% 8.8%
North. Arizona Univ. 1997-98 2,058 7,824 2,060 7,826
1998-99 2,160 8,076 2,160 8,076
% Change 5.0% 3.2% 4.9% 3.2%
South. Utah St. Coll. 1997-98 1,854 5,853 1,995 6,396
1998-99 1,910 6,016 2,054 6,578
% Change 3.0% 2.8% 3.0% 2.8%
West. New Mexico Univ. 1997-98 1,564 5,652 1,644 5,732
1998-99 1,710 6,206 1,830 6,326
% Change 9.3% 9.8% 11.3% 10.4%
Univ. of Hawaii, Hilo 1997-98 1,322 6,938 -- --
1998-99 1,394 7,010 3,962 9,890
% Change 5.4% 1.0% -- --

* NOTE: Many of the 1998-99 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 Res.
Grad.
Nonres. Grad.
Univ. of Cal., Berkeley 1997-98 4,355 13,339 4,395 13,379
1998-99 4,176 13,750 4,408 13,793
% Change -4.1% 3.1% 0.3% 3.1%
Univ. of Oregon 1997-98 3,648 12,099 6,150 10,449
1998-99 3,771 12,555 6,429 10,857
% Change 3.4% 3.8% 4.5% 3.9%
Oregon State Univ. 1997-98 3,510 11,460 6,012 10,230
1998-99 3,549 11,817 6,207 10,551
% Change 1.1% 3.1% 3.2% 3.1%
Univ. of Washington 1997-98 3,366 10,656 5,232 12,966
1998-99 3,486 11,508 5,424 13,470
% Change 3.6% 8.0% 3.7% 3.9%
Univ. of Hawaii, Manoa 1997-98 2,949 9,429 3,909 9,837
1998-99 3,045 9,525 3,962 9,890
% Change 3.3% 1.0% 1.4% 0.5%
Univ. of Alaska, Southeast 1997-98 1,704 5,304 3,792 7,392
1998-99 1,752 5,448 3,888 7,584
% Change 2.8% 2.7% 2.5% 2.6%
Colorado State Univ. 1997-98 2,925 10,147 3,267 10,557
1998-99 3,080 10,664 3,440 11,094
% Change 5.3% 5.1% 5.3% 5.1%
Univ. of Colorado, Boulder 1997-98 2,907 14,951 3,681 14,735
1998-99 2,945 15,145 3,729 14,927
(Unofficial notice of ~1.3% increase) % Change 1.3% 1.3% 1.3% 1.3%
Univ. of Montana 1997-98 2,630 7,505 2,942 7,834
1998-99 2,777 7,676 3,136 8,507
% Change 5.6% 2.3% 6.6% 8.6%
Univ. of Alaska, Fairbanks 1997-98 2,527 5,964 3,626 6,443
1998-99 2,680 6,376 3,844 6,616
% Change 5.6% 2.3% 6.6% 8.6%
Univ. of Wyoming 1997-98 2,326 7,414 2,812 7,900
1998-99 2,330 7,418 2,816 7,906
% Change 0.2% 0.1% 0.1% 0.1%
Univ. of Utah 1997-98 2,210 6,718 1,985 5,950
1998-99 2,284 6,913 2,045 6,219
% Change 3.3% 2.9% 3.0% 4.5%
Utah State Univ. 1997-98 2,174 6,615 1,951 5,828
1998-99 2,245 6,802 2,427 7,439
% Change 3.3% 2.8% 24.4% 27.6%
Univ. of New Mexico 1997-98 2,165 8,174 2,349 8,386
1998-99 2,242 8,461 2,442 8,690
% Change 3.6% 3.5% 4.0% 3.6%
Univ. of Nevada, Reno 1997-98 1,995 7,430 1,440 6,499
1998-99 2,184 7,855 1,674 7,444
% Change 9.5% 5.7% 16.3% 14.5%
Arizona State Univ. 1997-98 2,058 8,710 3,058 9,710
1998-99 2,160 9,112 2,160 9,112
% Change 5.0% 4.6% -29.4% -6.2%
Univ. of Idaho 1997-98 1,942 7,742 2,482 8,282
1998-99 2,136 8,136 2,676 8,676
% Change 10.0% 5.1% 7.8% 4.8%

Schedule 1 (C)
Annual Tuition Rates in Representative Institutions - 1998-99*
In Descending Order of Resid.U/Grad 1998-99 Rate
PAC-10 Public Institutions


Institutions

Year
Resid.
U/Grad
Nonres. U/Grad Res.
Grad.
Nonres. Grad.
Univ. of Cal., Berkeley 1997-98 4,355 13,339 4,395 13,379
1998-99 4,176 13,750 4,408 13,793
% Change -4.1% 3.1% 0.3% 3.1%
Univ. of Cal., Los Angeles 1997-98 4,044 13,026 4,496 13,478
1998-99 3,863 13,431 4,550 13,939
% Change -4.5% 3.1% 1.2% 3.4%
Univ. of Oregon 1997-98 3,648 12,099 6,150 10,449
1998-99 3,771 12,555 6,429 10,857
% Change 3.4% 3.8% 4.5% 3.9%
Oregon State Univ. 1997-98 3,510 11,460 6,012 10,230
1998-99 3,549 11,817 6,207 10,551
% Change 1.1% 3.1% 3.2% 3.1%
Washington State Univ. 1997-98 3,394 10,276 5,260 12,994
1998-99 3,523 10,681 5,461 13,507
% Change 3.8% 3.9% 3.8% 3.9%
Univ. of Washington 1997-98 3,366 10,656 5,232 12,966
1998-99 3,486 11,508 5,424 13,470
% Change 3.6% 8.0% 3.7% 3.9%
Arizona State Univ. 1997-98 2,058 8,710 3,058 9,710
1998-99 2,160 9,112 2,160 9,112
% Change 5.0% 4.6% -29.4% -6.2%
Univ. of Arizona 1997-98 2,058 8,710 2,058 8,710
1998-99 2,158 9,110 2,158 9,110
% Change 4.9% 4.6% 4.9% 4.6%

Schedule 2
Instruction Fee Recommendations
Full-Time Student
1998-99 Academic Year

1997-98 1998-99 % Change
EOU
Undergraduate Resident 2,316 2,316 0.0%
Undergraduate Nonresident 2,316 2,316 0.0%
Graduate Resident 4,242 4,371 3.1%
Graduate Nonresident 8,133 8,379 3.0%
OIT
Undergraduate Resident 2,592 2,592 0.0%
Undergraduate Nonresident 9,822 10,119 3.0%
Graduate Resident 4,377 4,512 3.1%
Graduate Nonresident 8,301 8,550 3.0%
OSU
Undergraduate Resident 2,694 2,694 0.0%
Undergraduate Nonresident 10,644 10,962 3.0%
Graduate Resident 5,196 5,352 3.0%
Graduate Nonresident 9,414 9,696 3.0%
PSU
Undergraduate Resident 2,694 2,694 0.0%
Undergraduate Nonresident 10,260 10,569 3.0%
Graduate Resident 5,196 5,352 3.0%
Graduate Nonresident 9,414 9,696 3.0%
SOU
Undergraduate Resident 2,520 2,520 0.0%
Undergraduate Nonresident 8,469 8,724 3.0%
Graduate Resident 4,377 4,509 3.0%
Graduate Nonresident 8,301 8,550 3.0%
UO
Undergraduate Resident 2,694 2,694 0.0%
Undergraduate Nonresident 11,145 11,478 3.0%
Graduate Resident 5,196 5,352 3.0%
Graduate Nonresident 9,495 9,780 3.0%
WOU
Undergraduate Resident 2,520 2,520 0.0%
Undergraduate Nonresident 8,796 9,060 3.0%
Graduate Resident 4,377 4,509 3.0%
Graduate Nonresident 8,301 8,550 3.0%
Other
OSU Vet Med Res 8,679 8,940 3.0%
OSU Vet Med Nonres 17,703 18,234 3.0%
UO Law Resident 5,196 5,352 3.0%
UO Law Nonresident 8,834 9,100 3.0%


Schedule 3
Building, Incidental, Health Service, and Resources Fee Recommendations
Full-Time Student
1998-99 Academic Year

1997-98 1998-99 % Change
Building Fee
All Institutions 75.00 75.00 0.0%
UO Law (Semester) 75.00 75.00 0.0%
Incidental Fee
EOU 537.00 537.00 0.0%
OIT 345.00 345.00 0.0%
OIT Metro Center 6.00 6.00 0.0%
OSU 360.00 390.00 8.3%
PSU 300.00 348.00 16.0%
SOU 343.50 331.50 -3.5%
UO 443.25 473.25 6.8%
UO Law (Semester) 443.25 442.99 -0.1%
WOU 315.00 357.00 13.3%
Health Service Fee
EOU 153.00 195.00 27.5%
OIT 225.00 225.00 0.0%
OSU 225.00 234.00 4.0%
PSU 162.00 177.00 9.3%
SOU 193.50 199.50 3.1%
UO 240.00 243.00 1.3%
UO Law (Semester) 240.00 240.00 0.0%
WOU 171.00 174.00 1.8%
Resource Fees
EOU
Technology Fee - All 150 150 0.0%
OIT
Technology Fee - All 72 72 0.0%
OSU
Technology Fee - All 156 156 0.0%
MBA Residents 390 390 0.0%
MBA Nonresidents 945 945 0.0%
Engineering 390 390 0.0%
Pharmacy 3,030 3,120 3.0%
PSU
Technology - Undergraduates 126 144 14.3%
Technology - Graduates 135 149 10.0%
Sch. of Bus. Masters 300 360 20.0%
Engineering 300 390 30.0%
SOU
Technology Fee - All 72 72 0.0%
MBA Residents 300 300 0.0%
MBA Nonresidents 450 450 0.0%
UO
Technology Fee - All 150 195 30.0%
Law Residents 3,900 3,885 -0.4%
Law Nonresidents 3,900 3,885 -0.4%
C. of Bus. U/G Residents 300 300 0.0%
C. of Bus. U/G Nonresidents 750 300 -60.0%
C. of Bus. Master Residents 300 1,500 400.0%
C. of Bus. Master Nonresid'ts 750 1,500 100.0%
Honors College 150 150 0.0%
WOU
Technology Undergraduates 72 72 0.0%
Technology Graduates 54 54 0.0%
UO Rec/Fitness Ctr Bond Fee
UO 45.75 45.75 0.0%
UO Matriculation Fee
UO 15.00 --

Schedule 4
Total Tuition Recommendations
Full-Time Student
1998-99 Academic Year

Full-Time Tuition

1997-98 1998-99 % Change
EOU
Undergraduate Resident 3,231 3,273 1.3%
Undergraduate Nonresident 3,231 3,273 1.3%
Graduate Resident 5,157 5,328 3.3%
Graduate Nonresident 9,048 9,336 3.2%
OIT
Undergraduate Resident 3,309 3,309 0.0%
Undergraduate Nonresident 10,539 10,836 2.8%
Graduate Resident 5,094 5,229 2.7%
Graduate Nonresident 9,018 9,267 2.8%
OSU
Undergraduate Resident 3,510 3,549 1.1%
Undergraduate Nonresident 11,460 11,817 3.1%
Graduate Resident 6,012 6,207 3.2%
Graduate Nonresident 10,230 10,551 3.1%
PSU
Undergraduate Resident 3,357 3,438 2.4%
Undergraduate Nonresident 10,923 11,313 3.6%
Graduate Resident 5,868 6,101 4.0%
Graduate Nonresident 10,086 10,445 3.6%
SOU
Undergraduate Resident 3,204 3,198 -0.2%
Undergraduate Nonresident 9,153 9,402 2.7%
Graduate Resident 5,061 5,187 2.5%
Graduate Nonresident 8,985 9,228 2.7%
UO
Undergraduate Resident 3,648 3,771 3.4%
Undergraduate Nonresident 12,099 12,555 3.8%
Graduate Resident 6,150 6,429 4.5%
Graduate Nonresident 10,449 10,857 3.9%
WOU
Undergraduate Resident 3,153 3,198 1.4%
Undergraduate Nonresident 9,429 9,738 3.3%
Graduate Resident 4,992 5,169 3.5%
Graduate Nonresident 8,916 9,210 3.3%
Specific Institution Programs
OIT Metro U/G Resident * 2,745 2,745 0.0%
OIT Metro U/G Nonresident * 9,975 10,272 3.0%
OIT Metro Grad Resident * 4,530 4,665 3.0%
OIT Metro Grad Nonresident * 8,454 8,703 2.9%
OSU MBA Resident 6,402 6,597 3.0%
OSU MBA Nonresident 11,175 11,496 2.9%
OSU Engineering U/G Resident 3,900 3,939 1.0%
OSU Engineering U/G Nonresident 11,850 12,207 3.0%
OSU Engineering Grad Resident 6,402 6,597 3.0%
OSU Engineering Grad Nonresid't 10,620 10,941 3.0%
OSU Pharmacy U/G Resident 6,540 6,669 2.0%
OSU Pharmacy U/G Nonresident 14,490 14,937 3.1%
OSU PharmD Resident 9,042 9,327 3.2%
OSU PharmD Nonresident 13,260 13,671 3.1%
OSU Vet Med Resident 9,495 9,795 3.2%
OSU Vet Med Nonresident 18,519 19,089 3.1%
PSU MBA Grad Resident 6,168 6,461 4.7%
PSU MBA Grad Nonresident 10,386 10,805 4.0%
PSU Engineering U/G Resident 3,657 3,828 4.7%
PSU Engineering U/G Nonresident 11,223 11,703 4.3%
PSU Engineering Grad Resident 6,168 6,491 5.2%
PSU Engineering Grad Nonresid't 10,386 10,835 4.3%
SOU MBA Grad Resident 5,361 5,487 2.4%
SOU MBA Grad Nonresident 9,435 9,678 2.6%
UO CBA U/G Resident 3,948 4,071 3.1%
UO CBA U/G Nonresident 12,849 12,855 0.0%
UO CBA Grad Resident 6,450 7,929 22.9%
UO CBA Grad Nonresident 11,199 12,357 10.3%
UO Law Resident 10,050 10,236 1.9%
UO Law Nonresident 13,688 13,984 2.2%

Note: Tuition includes instruction, resource, building, incidental, and health service fees at all institutions.
* At the OIT Metro Center, only the instruction fee, building fee, and a special $6 annual incidental fee are mandatory; other fees are optional.

Schedule 5
Resident Undergraduate Tuition
Comparing Relative Increases
With and Without a Three Percent Instruction Fee Increase



1997-98 Tuition Rates


Proposed 1998-99 @0%Incr Instr'n Fee


Percent Increase 97-98 to 98-99


Tuition with No Instruction Fee Freeze 1998-99 @3% Incr Instr'n Fee


Percent Increase 97-98 to 98-99
EOU 3,231 3,273 1.3% 3,342 3.5%
OIT 3,309 3,309 0.0% 3,387 2.4%
OSU 3,510 3,549 1.1% 3,630 3.4%
PSU 3,357 3,438 2.4% 3,519 4.8%
SOU 3,204 3,198 -0.2% 3,274 2.2%
UO 3,648 3,771 3.4% 3,852 5.6%
WOU 3,153 3,198 1.4% 3,274 3.8%

Schedule 6
Oregon Department of Higher Education
Comparison of Basic Residence Hall Rates 1997-98 to 1998-99

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.
1997-98 1998-99 % Change
EOU
Basic multiple, 19 meals 4,265 4,475 4.92%
OIT
Basic multiple, 19 meals 4,180 4,605 10.17%
OSU
Basic multiple, 19 meals 4,850 5,102 5.20%
SOU
Basic multiple, 19 meals 4,393 4,605 4.83%
UO
Basic multiple, 19 meals 4,646 5,100 9.77%
WOU
Basic multiple, 19 meals 4,268 4,506 5.58%


CALL TO ORDER

President Imeson called the adjourned meeting of the Board to order at 8:10 a.m. and noted that all Board members were present, with the exception of Dr. Whittaker.

PRESIDENT'S COMMENTS

Mr. Imeson commented that Board members had met for breakfast with members of the University Association. "This provided an opportunity to understand the perspective of that group as it relates to the needs for higher education here in Central Oregon," Mr. Imeson observed.

MASTER OF ENGINEERING DEGREES, PSU

Introduction

Portland State University requests authorization to offer Master of Engineering (M.Eng.) professional degrees in areas where the M.S. is currently in place, effective fall term 1998. This proposed graduate program responds to Oregon's growing need for engineers with advanced education, especially in the Portland metro area, and to the mandates of Senate Bill 504 passed by the Oregon Legislature last session. It is anticipated that 30 to 50 students will be admitted in the first year of program implementation.

Staff Analysis

1. Relationship to Mission

The mission of PSU, approved by the Board in 1991, states that PSU should "enhance the intellectual, social, cultural, and economic qualities of urban life by providing access to . . . an appropriate array of professional and graduate programs, especially relevant to the metropolitan area." Clearly, the proposed program is central to the goals of PSU's mission.

2. Evidence of Need

Increasingly, the Oregon economy is tied to the advanced computer and information technology industry. Yet, over the last two years, there is widespread agreement that this industry can only meet its total hiring needs by recruiting out-of-state engineering graduates. Such reports as the Governor's Task Force Report on Higher Education and the Economy (1/98); Oregon Business Council's report, Meeting Customer Needs ('96); and the OSSHE Graduate Task Force Report (10/96) all speak to the tremendous need for expanding graduate engineering education in Oregon. And this is not just an Oregon challenge. Numerous papers presented at a recent American Society of Engineering Education conference addressed the need for realigning graduate education to fit industry needs for the 21st century. In addition, other professional societies across the engineering disciplines are documenting the need for design-oriented M.Eng. degrees. Of the 402 U.S. and Canadian colleges and universities offering engineering and computer science graduate-level degrees, nearly 20 percent now have the M.Eng. option.

Industry and higher education are not the only entities recognizing the need for highly trained engineers. Senate Bill 504, which came out of the Oregon Legislature's 1997 session, mandates engineering education, stating that one of the criteria the Board of Higher Education should use when making decisions about investments in engineering education is

to build faculty and program capacity in the Portland area for relevant, graduate-level, professional education for engineers already working in the high-technology industry. Fields of concentration will include electrical engineering, computer engineering, software engineering, materials engineering, environmental engineering and other engineering disciplines and subdisciplines of direct importance to Oregon's high-technology industry. (SB 504 §4(1))

3. Description of Program

In response to the needs of industry, these applied, graduate-level degrees contain dual academic and internship experiences. The focus is on a design-oriented, technically advanced professional degree that reinforces design issues, decision-making, planning, and teamwork. This is a terminal degree with no individual research component, no laboratory experience, or thesis required. Students will undertake a set of graduate coursework periods that alternate with supervised intern periods in industry. The general course distribution pattern is 32 credits of approved technical core coursework and electives, and 13 credits of internship/industrial project. All coursework necessary to implement this program is currently in place in existing M.S. programs in the same disciplines. Admission requirements for the proposed degrees are identical to those required by the department and program for the current M.S. degrees.

The following Master of Engineering degrees will be offered:

As originally conceived, the M.Eng. in Systems Engineering would also be proposed at this time. However, PSU does not currently offer the corresponding M.S. degree; therefore, that degree program would need further development and review before being considered by the Board.

Each proposed degree program will briefly be described, as follows:

M.Eng., Civil Engineering. A typical schedule for a student seeking this degree would require two years in the following sequence: one term industry experience, three terms academic coursework, two terms industry, and one to two terms academic. Interns may be required to work up to ten hours per week in industry during their academic quarters. A minimum of two four-credit courses and a one-credit internship maintain full-time status during an academic quarter. A minimum of 45 credits are required for graduation, nine to 13 of which are internship. The internship requires written reports on the industrial experience.

M.Eng., Mechanical Engineering. This degree requires a total of 45 graduate-level credits, nine of which are for internship that includes a final project report. In addition to mechanical engineering classes, core required coursework includes approved graduate-level mathematics (four credits) and numerical methods (four credits).

M.Eng., Electrical and Computer Engineering. Requirements for this program include 20 core credits, 12 electives, and nine to 13 credits of internship and/or up to four credits of Special Projects. The core credits are in subdiscipline tracks specified by the department.

M.Eng., Engineering Management. Two options exist within this proposed degree (parallel to the structure of the M.S. degree).

Project Management is the applied science of managing large, complex projects as well as streams of small projects. Program objectives in this option include providing a solid understanding of the analytical framework, organization concepts, and interpersonal skills necessary for managing projects and programs. The program requires completion of 24 credits in the project management track, eight elective credits, four capstone project credits, and nine credits of internship (which include written reports).

Technology Management focuses on the concepts and processes of managing existing and emerging technologies. It includes planning, organizing, coordinating, and utilizing technology, from the evaluation and acquisition stages to the improvement, development, and innovation stages. Integration of technology and business strategies is a significant part of this option. Program requirements include 24 core credits in the technology management track, eight elective credits, four capstone project credits, and nine internship credits (which include written reports).

M.Eng., Civil Engineering Management. Civil engineering management allows for engineering management specialization in civil engineering including its subdisciplines (e.g., construction, transportation, water resources, structures, environmental engineering). This degree offering draws equally from both the Civil Engineering and the Engineering Management M.S. degrees, and requires that each student have two advisors (one from each department). Students will complete 16 credits from Civil Engineering, 16 credits from Engineering Management, four capstone project credits, and nine internship credits (which require written reports).

4. Adequacy of Resources to Offer the Program

Core faculty, courses, and support resources are in place and sufficient to offer this program. Graduate offerings in the School of Engineering and Applied Science are structured to accommodate the needs of the practicing engineer.

Program Review

The proposed program has been positively reviewed by appropriate institutional committees and the OUS Academic Affairs Council. Due to the urgency of responding quickly to the demand for qualified engineers in Oregon, no preproposal was presented to the Board.

Staff Recommendation to the Board

Staff recommended that the Board authorize Portland State University to establish a program leading to the Master of Engineering degree in the following areas: (1) Civil Engineering, (2) Mechanical Engineering, (3) Electrical and Computer Engineering, (4) Engineering Management with options in either Project Management or Technology Management, and (5) Civil Engineering Management. The program would be effective fall term 1998 and the OUS Office of Academic Affairs would conduct a follow-up review in the 2003-04 academic year.

Board Discussion and Action

Vice Chancellor Clark indicated that this proposal adds the Applied Masters degrees in several engineering degrees where there are already Master of Science degrees. "This would provide for students an option to replace the research thesis part of that degree with an internship project. That is the only difference of substance," Dr. Clark suggested.

Chancellor Cox reminded the Board that in the future programs such as these will not come before the Board since it is within the mission of PSU and is a modification to an existing degree authority.

Mr. Willis moved and Ms. Puentes seconded the motion to approve the staff recommendation. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

MASTER IN MANAGEMENT, SOU

Introduction

Southern Oregon University requests authorization to offer the Master in Management degree, effective fall term 1998. The program preproposal brought to the Board in October 1997 was originally conceived as a joint program with WOU; however, as the institutions began program development, regional differences and technology challenges made it clear that students would be better served by each institution offering a separate degree program.

The proposed Master in Management is an interdisciplinary course of study designed to help early- and mid-career managers throughout southern Oregon acquire the skills necessary to advance professionally while remaining on the job. The program is distinguished by its nontraditional delivery format, regional focus, and use of community resources and personnel. Southern's Medford campus will be the geographic center of the program for administration, advising, and some instruction. Courses will be offered at other sites throughout the service area as dictated by demand.

The proposed program will supplant the MBA degree offering at Southern. Students now enrolled in the MBA program will complete their degrees, but no new admissions are being accepted.

Staff Analysis

1. Relationship to Mission

SOU's mission, approved by the Board in 1997, begins with the sentence, "Southern Oregon University's primary mission is to provide a full range of excellent and thorough instruction in the liberal arts and sciences complemented by selected professional and graduate programs." Southern's most-recent strategic plan (completed in August 1997) articulates nine goals directly related to the mission, and the proposed master's program is clearly aligned with the second goal, which states:

Southern Oregon University will develop such graduate programs as the needs of its region require and its resources allow as well as cooperate with other educational institutions, public and private, to "broker" other programs as appropriate.

2. Program Description

Objectives. The proposed program seeks to accomplish the following objectives: 1) provide individuals working or having worked in arts, business, government, health care, and social service organizations, the skills and credentials necessary to advance in those fields; 2) deliver that instruction in a manner that allows working and otherwise placebound people throughout southern Oregon to continue to work while pursuing the Master in Management degree; 3) provide students with the benefits of a truly interdisciplinary learning environment; and 4) advance economic development in southern Oregon by increasing its cadre of skilled managers.

Curriculum. The program begins with a one-week intensive presentation entitled Society, Ethics, and Management. Following that, two five-week core courses will be offered each term, meeting on five consecutive Wednesday evenings, one Friday evening, and one Saturday (all day).

The goal of the program is to bring together the respective strengths of the commercial, government, and nonprofit sectors in a degree program that draws from several academic areas. Students will be required to complete 45 credits, as follows:

Students. In addition to Southern's regular graduate admission requirements, prospective students must have at least three years of progressively responsible experience at (or moving toward) the management level and be able to demonstrate a level of writing skill appropriate for management personnel. SOU anticipates an annual enrollment of 25 to 30 students.

3. Evidence of Need

The design of this proposed program responds to both the need in general for graduate education opportunities for managers in southern Oregon and the unique needs of students who are placebound and presently employed. Several recent studies support that statement. In one survey of people working in the region's public administration and health care agencies, 23 percent of the respondents had moderate to high interest in a Master in Management program (6/97). Respondents in another study most frequently cited "advancement in employment" as the reason they were considering further education ('96), and graduate students in Southern's School of Business found a demand for graduate education, particularly among employees of city, state, and federal government.

The three counties closest to SOU (Klamath, Jackson, and Josephine) have nearly 800 health care and government agencies, which employ more than 25,000 people. Further, the Oregon Department of Employment's 1998 Regional Economic Profile projects a 23-percent growth in the employment of managers and administrators in Southern's service region over the next decade.

4. Adequacy of Resources to Offer the Program

Program development and implementation will be supported through a combination of legislatively awarded regional access funds, internal reallocation from the suspended MBA program, and, in small part, by student fees.

Personnel. Faculty from SOU's Schools of Arts and Letters; Business; and Social Sciences, Education, Health and Physical Education have been involved in the development of the program and will participate in the teaching as well. Courses will frequently be team taught, with regional professionals to be used as teachers in specialty-area courses and as teaching team members.

A search is currently underway for a half-time program director who will be assigned to the political science department for the other .5 FTE. The program director's position combines the roles of administrator, teacher, and advisor. Marketing and logistical support will be provided by existing Extended Campus staff, and clerical support will be provided by staff currently employed in the School of Social Sciences.

Library, Facilities, & Equipment. The library will require a modest budget increase to enhance holdings in support of this program. Existing necessary facilities, equipment, and technology are adequate to support the proposed program.

Program Review

The proposed program has been reviewed positively by all appropriate institutional committees, the Academic Council, and by an external review team. The team was supportive of the program, stating that "there is a sufficient depth and breadth of coverage in terms of faculty availability and expertise to offer the program." The team agrees that the program is responsive to regional needs and employment trends. Southern has carefully considered and responded to the few concerns raised by the external review team:

Staff Recommendation to the Board

Staff recommended that the Board authorize Southern Oregon University to establish a program leading to the Master in Management, effective fall term 1998, with a follow-up review of the program to be conducted by the OUS Office of Academic Affairs in the 2003-04 academic year.

Board Discussion and Action

Vice Chancellor Clark observed that this program had been in the process of planning for a considerable amount of time. "It has undergone a very thorough planning process and there was an external review of this proposal. The program will supplant the MBA program at SOU that has been suspended in terms of the enrollment. Students already in that program will finish, but SOU would like to redirect students into the new management program," Dr. Clark continued.

Chancellor Cox asked the Board to consider a new process that he and Vice Chancellor Clark have discussed. "With the new program approval process, one of the possibilities is to give you 30 days' notice of the actions that Dr. Clark is recommending to the Academic Council and that I am prepared to approve. Any Board member who sees something they want brought to the attention of the Board could be moved to the agenda for the next meeting. Perhaps this would satisfy your need to be informed and provide an opportunity to let us know that you want to talk about it," the Chancellor added.

Mr. Willis moved and Mr. Koch seconded the motion to approve the staff recommendation. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

STATUS OF THE WESTERN UNDERGRADUATE EXCHANGE PROGRAM

Staff Report

This was 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 Board approved a staff recommendation for OUS 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: (1) that most institutions have some programs that can accommodate additional students at little or no additional cost; and (2) that additional nonresident students can be attracted to those programs by offering a tuition discount.

Board guidelines for OUS 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 OUS Office of Academic Affairs;

Nonresident students previously or currently enrolled at OUS 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 OUS Office of Academic Affairs reflecting the number of WUE students enrolled by program, together with the students' states of origin.

Nonresident WUE students pay 150 percent of resident tuition if they apply and are admitted to one of the designated WUE programs; they receive a fee remission for the difference between 150 percent of resident tuition and nonresident tuition. WUE tuition is significantly less than nonresident tuition at institutions in all participating states.

Total WUE enrollment in all participating states has more than doubled over the life of the program, from 3,931 students in 1990-91 to 8,388 students in 1997-98. Oregon students enrolling in WUE programs in participating states have increased from 288 students in 1990-91 to 730 students in 1997-98 (153 percent). WUE students from other states enrolling in Oregon institutions increased from 62 in 1990-91 to 576 in 1997-98 (829 percent). In 1997-98, Oregon had a net outflow of 154 students under the WUE program.

Tables that follow display Oregon WUE enrollments since 1990-91.

The WUE program provides Oregonians with competitively priced out-of-state higher education alternatives. For example, in 1997-98, the average OUS resident tuition rate of $3,285 was lower than the WUE tuition rate of $4,005 at the University of Montana, but higher than the WUE tuition rate of $2,913 at the University of Idaho. However, the outflow of Oregon resident students represents a potential loss of enrollment for OUS institutions, particularly to institutions in Idaho (223 students) and Nevada (201 students).

Board Discussion

Vice Chancellor Clark indicated that this annual report on the status of the WUE program satisfies Board policy to report on the program.

Table 1
Students from WUE States

Enrolled at Oregon Institutions

Institution 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98
EOU -- -- -- -- -- -- -- --
OIT 32 33 55 58 67 70 55 54
OSU 9 21 34 46 79 112 180 265
PSU 3 4 3 2 5 6 7 8
SOU 7 14 36 37 34 66 87 174
UO 11 16 28 52 84 56 63 43
WOU 0 0 0 0 2 3 3 32
TOTALS 62 88 156 195 271 313 395 576
% Change 42% 77% 25% 39% 15% 26% 46%


Table 2
Oregon Students Enrolled at
Institutions in WUE States*

State 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98
Alaska 1 15 13 27 25 34 14 13
California -- -- -- -- -- -- -- 2
Colorado 10 13 17 28 39 50 55 57
Hawaii 4 3 1 3 6 4 11 21
Idaho 147 352 285 305 327 288 226 223
Minnesota 12 15 -- -- -- -- -- --
Montana 87 131 247 269 215 140 114 87
Nevada 0 0 13 62 73 135 163 201
New Mexico 1 2 4 6 5 4 4 2
North Dakota 11 18 19 16 37 34 29 33
South Dakota 2 8 8 12 12 17 19 21
Utah 7 6 17 20 32 31 34 46
Wyoming 6 5 11 17 13 27 20 24
Totals 288 568 635 765 784 764 689 730
% Change +97% +12% +20% +25% -3% -10% +6%

*Arizona, California (except California Maritime Academy), and Washington do not participate in WUE.

FOLLOW-UP REVIEWS CONDUCTED IN 1997-98 OF SELECTED PROGRAMS

Staff Report

In November 1990, the Board approved a policy directing the OUS 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 describe the status of the programs five years after their implementation. For each program, institutions have reported briefly on major modifications in the program, enrollment, degree production, accreditation (when applicable), resources, and student outcomes.

During the 1997-98 academic year, the following programs were reviewed:

Eastern Oregon University

Oregon Health Sciences University

Oregon State University

Summaries of the eight program reviews follow.

A.A. in General Studies, EOU

In October 1990, the Board authorized EOU to offer an instructional program leading to an A.A. in General Studies, which was implemented December 1990. The purpose of this program was to provide an educational option for people in eastern Oregon who were not served by a community college and wished to pursue further education, either for employment reasons or as the first step in earning a baccalaureate degree at Eastern. Board members and institution officials agreed that offering this degree was aligned with Eastern's mission to meet the educational needs of Oregon's ten eastern-most counties.

This broad general education program requires completion of 93 credits, distributed evenly among humanities; natural sciences; social sciences; and arts, language, and logic. Students also complete four credits of college-level math, a three-credit computer literacy requirement, an eight-credit writing requirement, and the Writing Proficiency Examination.

Admission requirements were set according to community college standards. Consequently, students who might otherwise not be admissible to Eastern are provided the opportunity to develop college-level skills. Although not designed as a transfer degree, because this program meets EOU's general education requirements, students may continue moving toward a baccalaureate degree at Eastern. No new resources were needed to implement this program.

Currently, 20 students are in the program, and the number of degrees awarded has ranged from three to nine per year. The majority of students who inquire about the program intend to transfer to another Oregon university and erroneously believe that this degree is equivalent to the AA/OT. Because of this (and the fact that EOU would prefer not to continue to offer AA degrees), Eastern, through the Eastern Oregon Collaborative Colleges Center, is working with Blue Mountain and Treasure Valley Community Colleges to develop an AA/OT that is available entirely through telecommunications and technology (asynchronously). The degree will be awarded through those community colleges, and Eastern will provide some of the coursework. Once that degree is in place, EOU intends to terminate offering the AA in General Studies.

B.A./B.S. in Multidisciplinary Studies, EOU

In May 1990, the Board authorized EOU to offer an instructional program leading to a baccalaureate degree in Multidisciplinary Studies, which was implemented fall 1990. This program is a prescriptive general education degree designed to provide a prospective elementary school teacher with knowledge and skills in the humanities, fine arts and logic, and natural and social sciences. In addition to requiring extensive coursework in these four major divisions of general education, a fifth area relating to computer literacy, personal health, and speech is mandatory. Further, students are required to complete two academic minors, select two writing-intensive courses from their minor areas, and complete a capstone experience in either minor. For prospective elementary teachers, the capstone requires student teaching, two major work samples, and passing the National Teachers Examination (NTE) professional knowledge test. For nonelementary candidates, the capstone entails completion of a written synthesis of their multidisciplinary emphases in two subject areas. All coursework, faculty, and supporting resources (e.g., buildings, equipment, reference materials) were in place to support the program.

The program is approved for teacher preparation through the Teacher Standards and Practices Commission. It also has a professional advisory board -- The Eastern Education Consortium -- consisting of public school educators and administrators, and EOU faculty, administrators, and students.

No major modifications have been made in the program. This degree is offered in conjunction with Blue Mountain Community College, Treasure Valley Community College, and Central Oregon Community College and the University Center. Many elements of the degree program are available at a distance through individualized studies and computer conferencing. Typically, the general education coursework and required academic minors are available through a combination of community college coursework and individualized studies.

When the program was originally presented to the Board, it was estimated that 60 to 70 students would be enrolled at any given time, producing 45 to 60 graduates per year. Those figures have proven remarkably accurate, with approximately 50 students enrolled and another 50 graduating annually. Because the degree requires a specific repertoire of science, mathematics, history, geography, psychology, philosophy, literature, art, music, and health, students emerge with predictable sets of knowledge. Consequently, graduates from this program enjoy a high placement rate, typically greater than 90 percent.

Although some minor revisions in the degree have been made to accommodate smoother transitions from the community college setting, the degree has remained unchanged in its overall dimensions and philosophy. Eastern intends to continue using this degree as its primary vehicle to educate elementary teachers.

B.A., Theatre Arts, EOU

In September 1991, the Board authorized EOU to offer an instructional program leading to a B.A. in Theatre Arts, which was implemented winter 1992. The program was designed according to standards established by the Association for Theatre in Higher Education. In addition to Eastern's general education requirements, students complete 64 credits in theatre arts, and all graduating seniors complete a capstone project in their area of specialization.

Three things served as a catalyst for this program's development: the increasing number of students taking theatre arts classes, the newly constructed Loso Hall, and wide community and regional support. More specifically, 107 students enrolled in theatre arts classes in 1984-85. By 1988-89, 540 students enrolled (about one-fourth of the school's entire student population). Loso Hall provided the perfect environment for this degree, housing two state-of-the-art theatres (totaling 575 seats) and adjoining technical spaces. Finally, the community and region expressed support and need for the program in several ways. In 1991, community members contributed more than $8,000 to the theatre foundation account to provide scholarships for students studying and performing at EOU, and they purchased 7,000 tickets for capacity audiences at most performances. The previous year, the communities of Elgin, John Day, and Wallowa each contacted Eastern Theatre requesting assistance in starting up community theatres. Other local and regional activities made it apparent that a degree program at Eastern would provide an anchor and starting point for numerous small communities who hoped to provide theatre as a form of art and recreation.

At the time the program was developed, all coursework, faculty, staff, and equipment/materials were in place. No further budgetary needs were identified. The program remains virtually unchanged, although some slight modifications have been proposed. These include a senior seminar requirement and expansion of the senior-level theatre history requirement.

It was anticipated that, when fully implemented, the program would have 40 students enrolled and eight graduates per year. Actual numbers are very close to those projections. Currently, 42 students are enrolled, and each year student graduation rates have been relatively stable or even increased. Thirteen students graduated from this program in 1997. Senior capstone projects have been completed in directing, acting, design (costume and stage), historical research, and public school projects. Students also receive outside evaluation and criticism from professionals through EOU's participation in the American College Theatre Festival. Graduate outcomes have included pursuing further education, participation in professional theatre, and teaching.

Ph.D. in Neuroscience, OHSU

In September 1992, the Board authorized Oregon Health Sciences University to offer an instructional program leading to a Ph.D. in Neuroscience, effective fall term 1992. Neuroscience -- the study of the nervous system -- encompasses a broad range of disciplines in the quest to understand how the nervous system is organized, functions, and controls behavior. Currently, more than 100 faculty from the OHSU academic and research units of the Schools of Medicine and Dentistry, the Vollum Institute, the Center for Research on Occupational and Environmental Toxicology (CROET), the Neurological Sciences Institute (NSI), and the Portland Veterans Administration Medical Center (VAMC) are involved in this interdepartmental, interinstitutional program. When first proposed, the program earned an exceptional external review, labeling it as one of the strongest neuroscience programs in the western U.S.

This Ph.D. program has proven to be as high quality as anticipated. Thirty-two students are currently enrolled (average seven per year) and 11 degrees have been awarded since program implementation. The demands on the student are rigorous. During the first year, students study biochemistry and molecular/cellular biology, how it is applied to the nervous system, and gain a basic understanding of the two aspects of the nervous system (complexity and speed) that make it unique compared with other organ systems. Once the first-year coursework is completed, all student experiences are career related and include a variety of required teaching experiences, laboratory research, the writing of a research proposal in the form of a postdoctoral NIH grant, and, of course, the thesis itself. A student typically participates in three or four research rotations of about three months each. During the nine months of core curriculum, two days per week are left open from courses so students can be devoted to laboratory work. Incoming students are strongly encouraged to arrive at the start of the summer so they can work full time in a lab for several months before courses begin. Last year, the seven first-year students chose to join labs at the Dental School, the Primate Center, CROET, the Vollum Institute, the Neurology Department, and VAMC. In this way, the program provides support for individual labs campuswide.

The student publication record is exemplary. To date, they have published 92 articles. Post-graduation outcomes have also been excellent, and include:

All first-year students receive a $14,000 stipend plus fees. Money from training grants provides partial support for stipends, tuition, and fees for American citizens whose research interests fall within the rubric of the grants. Two training grants have been generated using the Neuroscience Graduate Program as the training environment for predoctoral candidates: Multidisciplinary Training in Neuroendocrinology ($332,000 total budget) and Training Program in Neuronal Signaling ($146,000 total budget). These grants have a total of eight predoctoral slots, each of which pays about $6,000 in tuition to OHSU each year. All teaching and office spaces for the program are located in the Vollum Institute. The library and facilities continue to amply meet the needs of the students.

M.A. in Applied Anthropology, OSU

In September 1991, the Board authorized OSU to offer an instructional program leading to an M.A. degree in Applied Anthropology, effective winter term 1992. An outgrowth of the M.A. in Interdisciplinary Studies (MAIS), the program is the only applied anthropology master's in the University System. (PSU and UO both offer master's degrees in anthropology.) Nonacademic needs in business and government have helped move the discipline to a more applied focus.

As originally conceived, the program would offer six concentrations: 1) business anthropology with an Asian focus; 2) cultural resource management; 3) historic archaeology; 4) language and cross-cultural communication; 5) health and culture; and 6) natural resources and communities. Each of these concentrations interlock around a common core of subject matter and overlap in terms of contributing faculty. A seventh concentration has been added -- First Americans -- which reflects the expertise of one of the newer faculty members. The only other modification anticipated in the future is to delete the Asian focus from the one concentration, thereby making it more generally "business anthropology."

Of the nine regular faculty members who originally offered the program, only three have left and each has been replaced. Resources shifted from the MAIS program and some external funding continue to support this program. Grants have been received from such agencies/efforts as: Women, Infants, and Children project; Linn County Welfare Study; and Effects of Natural and Anthropogenic Processes on Tillamook Bay and its Watershed. Although the program remains viable, there is a need to upgrade computers and archaeological equipment.

One feature of the program that was initially praised by the external reviewers and has been very successful is the required 6- to 12-credit internship. A sample listing of internship sites follows:

Currently, 29 students are enrolled in the program, and 26 degrees have been awarded since 1992. Of these graduates, eight are in Ph.D. programs, one is completing a second baccalaureate degree and applying to a Ph.D. program, and most of the others are employed (e.g., archaeology consultant, Thomas Jefferson Poplar Forest archaeologist, Bureau of Land Management in Prineville, director of international programs at the University of New Mexico). There has been a steady increase in the number of graduates from this program, growing from two in the early years to nine in 1998.

Ph.D. in Bioresource Engineering, OSU

In January 1991, the Board authorized OSU to offer an instructional program leading to a Ph.D. in Bioresource Engineering, which was implemented fall 1991. A relatively new field, bioresource engineering is the application of life science principles and engineering analysis to optimize the use and sustainability of biological resources. Prior to this program, graduate students wishing to pursue this field of study were forced to earn degrees in another department while engaging in bioresource engineering research. Consequently, students had to meet disciplinary requirements not necessarily pertinent to their graduate study in bioresource engineering. Implementation of this Ph.D. program responded to student demand as well as the growing need of Oregon's food and agricultural industries.

Bioresource engineers address such areas as problems related to the production, processing, and preservation of food, feed, and fiber; biological waste management and utilization; and agricultural and biological systems analysis. The program's curriculum is engineering based with strong emphasis on the life sciences. Research and extended education efforts of the department are concentrated in two major areas: bioprocess engineering and water resources engineering. There have been no major modifications in the program, and while some changes have been made in the courses offered, the overall direction of the program has remained unchanged. There has been no loss of faculty FTE, and little faculty turnover. Eleven faculty members (10.75 FTE) are central to the program and, additionally, other faculty serve as resources to the students. Resources are sufficient to continue offering this program.

Student response to the program has been favorable. In the original proposal, OSU anticipated an enrollment of ten students, with at least four graduating in the first five years. Actual numbers have exceeded those expectations. Currently, 15 students are enrolled in the program, eight of whom are women. The first degree was awarded in 1994 and, to date, 13 students have graduated. All of these graduates have been successful in gaining employment and are working in their area of interest.

B.A. in International Studies, OSU

In September 1992, the Board authorized OSU to offer an instructional program leading to a B.A. in International Studies, effective fall 1992. This is classified as a concurrent degree, to be awarded only in conjunction with another primary baccalaureate degree. The intent of this format is to provide all undergraduates the opportunity to develop a global perspective within the context of their chosen academic field. To be admitted, students must have a cumulative GPA of 2.75. To graduate with this degree, students are required to demonstrate proficiency in a foreign language equivalent to four years of college, complete a minimum ten-week study or internship abroad in an approved program, and complete an integrative senior project that focuses on understanding of global issues within the student's primary undergraduate major. The only foreseeable program modification would be the addition of a one-credit seminar course entitled "Introduction to Project or Thesis." This corresponds closely to a course required of University Honors College students.

The program requirements have led to student success, both in terms of academic rigor and post-graduation outcomes. Following are some examples of senior project titles, followed by that student's post-graduate activities. (The student's primary major is listed first in brackets.)

Student graduation rates have remained stable or grown each year, from four graduates in 1994 to 17 in 1998. Of the 40 total graduates prior to 1998, nine are in graduate school; ten work in business; and seven work in education, government, or nonprofit agencies.

A director (.33 FTE, nine-month appointment) and assistant director (.75 FTE, 12-month appointment) serve as staff to the program. Although current resources are adequate to continue supporting the program, an additional full-time person could increase student enrollment by approximately 50 percent. Several grants have been generated by this program. One grant for over one-quarter million dollars provided support for fourth-year language classes and scholarships for students to study abroad. That grant has ended, and additional resources are being sought.

Ph.D. in Molecular and Cellular Biology, OSU

In October 1992, the Board authorized OSU to offer an instructional program leading to a Ph.D. in Molecular and Cellular Biology (MCB), which was implemented fall 1992. MCB is an interdisciplinary approach to the study of molecular and cellular aspects of biological systems. OSU's program emphasizes molecular genetic techniques and interdisciplinary training with special emphasis on the application toward solving problems in the fields of agriculture and forestry, particularly in the plant sciences and virology.

Most of the courses and seminars necessary to implement the MCB program were in place at the time the program was proposed. Approximately 50 faculty members drawn from 12 departments in the Colleges of Agricultural Sciences, Forestry, and Science were involved. Criteria for faculty to join the program are: 1) research training in MCB; 2) an active research program in MCB; and 3) a willingness to participate in the teaching, recruiting, and administrative activities. It was acknowledged from the beginning that the composition of the MCB faculty would be subject to change as new faculty were added. Also, the status of each MCB faculty member is subject to review every five years by the MCB Executive Committee to determine whether their participation in the program is appropriate. Since its inception, the number of faculty in the MCB program has grown to 65 and includes several newly hired faculty whose research area is cell biology.

Admission standards were set higher than those required by other traditional departments in the biological sciences. Students must have a 3.3 or higher GPA, and their total GRE scores must rank in the top 10-20th percentile. There was little budgetary impact because the program is subsidized primarily by training grants and faculty research grants. Resources continue to be excellent.

No major modifications of the program have occurred or are anticipated. Three laboratory research rotations and two terms of student teaching are required, as well as Ph.D. preliminary exams (written and oral), a Ph.D. thesis, and a dissertation exam. Student outcomes have been commendable. One graduate has progressed directly to an assistant professorship at a liberal arts college, and the rest of the graduates are involved in postdoctoral work, as follows:

Board Discussion

Dr. Clark indicated that this review is in accordance with Board policy to conduct follow-up reviews of new programs five years after their implementation. The report includes a list of programs implemented five years ago and abstracts of the reviews.

SYSTEM PERFORMANCE INDICATOR REPORT

Background

The performance measures and indicators initiative began in January 1997 with the adoption of four strategic goals by the Board of Higher Education. These goals are:

1) Strengthen existing quality of instructional, research, and service programs;
2) Expand access by students of different circumstances;
3) Achieve cost-effectiveness appropriate to institutional missions; and
4) Enhance employability of graduates.

These goals, which were written into law by the 1997 Oregon Legislature and later affirmed by the Governor, were used to guide the development of nine performance indicators: baccalaureate degree completion (a six-year graduation rate), graduate abilities, customer satisfaction, new students, student quality and diversity, graduate success and state needs, external resources and entrepreneurship, state's investment, and institutional management. At the November 1997 meeting, the Board approved a schedule for implementing the performance indicators in phases. OUS completed phase one for the System as a whole in March 1998 and for individual campuses in June 1998. Phase one involved reporting performance trends for the indicators for which data are already collected and maintained. Based on these data, the institutions set improvement targets for 2005 and outlined strategies to attain targets. Chancellor's staff will review the appropriateness of campus targets (e.g., Are they challenging enough? Are they attainable? How does the target compare to peer performance?). Discussions with campus leadership will be held to modify targets as needed. System targets will be based on an average weighted in proportion to an obvious property for each indicator (e.g., total credit enrollment). The institutions will report periodically to the Board on their progress toward achieving the 2005 targets.

At the June 1998 meeting, the Board directed Chancellor's staff to return in July 1998 with a format for a performance report and a recommendation for a process for "grading" System performance. The first report to the 1999 Legislature will be an assessment of System baseline performance for the indicators for which OUS already maintains data.

Purpose of the Performance Report

The vision of the Board of Higher Education for OUS is reflected in four overarching strategic goals designed to further meet the needs of the state. These goals -- quality, access, employability, and cost effectiveness -- stem from the common purposes for OUS units, yet recognize and nourish the different missions of the institutions.

Oregon's seven public universities serve diverse communities through their unique missions. The purpose of the System performance report is to demonstrate that OUS is accountable for the progress universities make. This annual report is designed to give the general public, elected officials, business leaders, and consumers of higher education a summary of the System's progress through the use of current information collected and analyzed by the Chancellor's staff. It is designed to be a balanced, accurate reflection of where the System excels, and where it needs to improve.

Performance Report Format

Experience gleaned from systems of higher education in other states that report performance to legislatures and the public suggests that limiting the number of indicators to the most salient and presenting the information in a simple and straightforward manner is the best approach. Several options for the format for this performance report are proposed.

In the format displayed on Tables 2 and 3, staff proposes levels to grade progress OUS makes toward the attainment of key performance measures and goals. These four levels are:

Exceeds targets. Performance exceeds targets; results compare favorably with established benchmarks or a high level of baseline performance is shown.

Meets targets. Improvement meets targets.

Improving performance. Progress has been made, but improvement falls short of targets.

Needs improvement. No evidence of positive change, or performance is below standard or changing in undesirable directions.

The Process

Staff suggests the Board follow a process for evaluating System performance.

  1. A committee composed of Board members and, at the discretion of the Board, external representatives will be convened in fall 1998, and every two years thereafter, to review System and university performance.
  2. Prior to this meeting, OUS institutions will be asked to complete a self-assessment of baseline performance using the trend data reported in the June 1998 report.
  3. The self-assessments will be reviewed, along with other factors, by the committee in evaluating each measure.
  4. These evaluations will reflect a consensus of the committee and its best efforts to measure value, assess trends, and validate targets for ongoing improvement and communication.
  5. The indicators in the 1998 Performance Report will serve as a baseline against which future performance will be measured and reported in subsequent Performance Reports.

Discussion Issues

Several issues require the Board's attention.

Board Discussion

Vice Chancellor Clark reminded the Board that at the last meeting she had indicated that she would return with some alternative formats for performance reports. Three alternative possibilities were presented for Board discussion. Dr. Clark said, "I have two questions for you -- one, do you have a preference or advice regarding format, and the second deals with process. Our advice would be that a committee composed of Board members, or an existing committee with or without external representation added, might be the group to actually make the judgment based on the data that are developed as to whether, in your perspective, the performance meets targets, exceeds targets, or needs improvement."

Mr. Imeson indicated a preference with having some external representatives, specifically some that are not academics. Ms. Wustenberg and Ms. McAllister added that they favored some kind of report that provided a trend line with supportive data to back it up. There was general discussion about the difficulty of showing trends when, in fact, there is no existing data. Vice Chancellor Clark explained that was part of what she and her staff were trying to sort out. "We have areas and indicators where, in fact, we can show trend data if we want to show that. We have other indicators where we are starting to collect data for the first time. In those cases, we will be able to develop trend data. We might want some combination of reporting because we probably do want to show some areas in which we are starting to collect data."

Mr. Lussier commented that, "At some point in time, we should develop targets that allow us to set priorities from a governance perspective about how fast or slowly we need to move. Trend information is all right, but I think overriding that are perhaps some pretty explicit targets that really telegraph to the public and the institutions what the priorities are."

Dr. Clark reminded the Board that the presentations at the June Board meeting was set up so the institutions, relative to their different missions and strategies, would show individual differences. "But we also have the challenge of overall System direction that roll up these targets and that is probably what you want to look at."

Vice Chancellor Vines offered, "Wouldn't it be important that when the Executive Committee met with presidents about their campus goals they talk about the targets that they have selected so they could be a part of how the campuses are judged?"

Mr. Lussier pointed out that it is not so much control or judgment about where the institutions are as it is a focus. "Targets to me are a very good way to focus what we really believe and mean and communicate that," he added.

President Creighton suggested that perhaps the Board needs to look at more narrowly defined windows. "We have a year 2005 as the end point. Perhaps what we need to do is to find year-by-year benchmarks for each institution as we move towards that 2005 goal line." Vice Chancellor Clark responded that there are plans for interim reports. "What I am also hearing is, as we think about how presidential campus evaluations may converge with this process, we have to account for that, particularly with the timing, as well as the selection of specific measures."

RECOMMENDATIONS OF THE BOARD GOVERNANCE AND STRUCTURE COMMITTEE (CONTINUED FROM JULY 16)

President Imeson reminded the Board that although there was a great deal of discussion on the report of the Committee, action had been delayed.

Mr. Willis indicated that the changes to the recommendations made the day before were available to the Board members as well as a draft resolution on the System. Since Mr. Lussier and Ms. Puentes were not present during the prior discussion, Mr. Willis offered them the opportunity to make some comments.

Mr. Lussier underscored his interest in how the Board could change to be more responsive to and reconnect with the various constituencies around the state. "The opportunities that we have had here (in Bend) to meet with outside boards and groups of citizens always infuse new ideas. Perhaps they don't give us dramatic new directions, but certainly they do give us some things that can be factored into decision processes. We have tremendous strengths on which to build the institutions, but I am just as excited about creating a System that isn't so institution based. I think that is the governance model that we tried to express through most of the proposals."

Ms. Puentes related her participation on the Committee to the interactions the Board had with the constituent groups in the Bend area. She asked what attempts had been made to bridge the community's interests in higher education with those of the Board. She concurred with Mr. Lussier that the Board had to be more closely tied with the constituencies. Continuing, she asked, "Why has it (the proposals for an outside provider for higher education in Bend) come to this point without having worked on more resolutions?"

Mr. Lussier indicated that he had participated with the groups, but not as a representative of the State Board of Higher Education. "This is about the fourth group since I have been in Oregon, that have essentially done the same thing: look at higher education opportunities in the state. As these groups form and as they become really largely citizen based and attempt to create dialogue, one of the things that they try not to do is get constrained by lack of resources, or past history, or too bothered with facts. They strike out on their own, maybe isolating themselves so that they can come out with a pure solution to which everybody then can have an opportunity to respond." Mr. Lussier concluded that the group now is beginning to make their planning public and asking for some input from others.

Ms. Puentes emphasized that it was important for Board members to try to stay informed with what is occurring around the state.

Mr. Willis moved and Dr. Aschkenasy seconded the motion to approve the Committee recommendations with the changes suggested. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

COMMITTEE REPORTS

Budget and Finance

Mr. Imeson said that essentially the Committee report had been covered in the previous days' discussion regarding the budget proposal.

Joint Boards Working Group

Ms. Puentes reported that the Joint Boards Working Group had met on July 8, 1998 and, since there was going to be extensive discussion during the Renewal Work Session, she would save the rest of her report for that time.

OHSU

Mr. Imeson reported that the OHSU Board had not met since his last report in June.

ITEMS FROM BOARD MEMBERS

Dr. Aschkenasy commented about a concern he had regarding institution specific fees. "I am using this as an example," he pointed out, "the pharmacy people at OSU are proposing to raise fees a $1,000, which is a considerable amount of money. I am not questioning whether it is appropriate or needed. What concerned me a little bit is the idea of doing these kinds of things mid-stream. I wonder if the Board should urge institutions to grandfather people in? I thought it might be worthy of Board discussion if you thought it appropriate." President Risser indicated that he wanted to point out a small correction. "We raised our fee in Pharmacy three percent, not 30 percent as shown."

Ms. Christopher added that the idea of having time on the agenda for discussion might include one on fees. It could be arranged as an information and discussion session. Ms. McAllister expanded the thinking and added that she was looking toward discussion of policy issues in this area as well.

Mr. Willis thanked members of his Committee, Chancellor's Office staff, and external participants.

Mr. Koch thanked the Board for their patience with him, "I am learning my way around the System and the process. I am 100 percent behind this new funding model and this new system and plan to fight right beside everybody else to see that it gets fully implemented and gets all the support from the legislature that it needs."

ADJOURNMENT

The meeting adjourned at 8:55 a.m.

Diane Vines
Secretary of the Board

Tom Imeson
President of the Board