State Board Meeting- PSU Friday 16 July 2004
 

Fabre Committee Meeting Friday 16 July 2004.

Biennial Operating Budget Request. Postponed until full board meeting.

Quarterly Managerial Report: Projected surplus of 16,000,000 for year. Education and general revenues declined. Had 20,000,000 reduction of state budget allotment. Some timing issues. Tuition and enrollment increases. In cash balance reports - nothing to note. They are healthy - fiscal status of system a bit healthier than expected.

Don Blair: Is there anything that causes you concern for system or individual Universities? Answer. Is there impact on quality? Expenditure hold backs.

Tom Anders: Issue provide back to governor administrative savings. All state agencies should do report what level of savings are and can dollars be transferred to another state agency. Issue for us. Given expenditure rate to rate - appears as though fund balances are growing. Campuses are saying over next 8-10 months, will be spend down. Issues related to administrative expense level will be mitigated. Worry about balances growing. Campuses worried about issues out there. Have moved to a more conservative approach. Vulnerable on administrative savings.

Don Blair: Fund balances. We did talk about this a bit. Look at year end for fund balances. Have a better sense of where PERS are going. Come back in September - look at year end financial statements.

GS: How we use fund balances. Legislatures are focused on communities where access is a key issue - need to be able to characterize what we do in those terms. Have vulnerability. Don Blair. Wonít wait until next fiscal year. Will look at fiscal year that just ended at our September meeting. Approach it with a great deal of urgency. Kirby Dyer - things were earmarked for spending. Tom Anders. We have looked at the policy after review by Finance Committee. Provided another descriptive piece clarifying things. September will be another point to gauge accuracy of what was stated then.

Tuition mitigation plan

Tom Anders: Tried to follow Board direction in key areas. Looking at % would be applied. Chose 15% - utilize 1.4 Mil of Chancellors office fund balance. For Resident Undergraduate tuition at all levels will not exceed charges levied at comparable levels in Spring 2004 not to exceed 15%. Impact on campuses varies. What we are looking at - projection is 2.4 million. Could use 1.4 from fund balances. Remaining 1 Mil would be assumed by each campus. So entire mitigation is split in this way. This is for one year only. If you are a student who is realizing a `benefití, next year the increases will be fully implemented that you didnít feel this year. Increases in 2005-7 budget, that will be another increment. Not really hidden. There is an increase that a student will feel in 2005-6 that is not felt now because the mitigation. Need to document this.

Kirby. Can this be different by campus? Emphasize only works for one year. Has to be real transparent what is going on. Equally transparent. Best thing to do - provide high level guidelines and let campuses go. Each campus has own administrative process. Donít want them to change it in any way. The 1.4 mil comes out of 3.1 million permanent savings. Don Blair - could come out of fund balances? Don Blair. Fund balances are not permanent. Fund balances and mitigation go hand in hand? Tom Anders 1.4 was raised at board meeting. Fund balance in Chancellorís office - gross level is around 3.7 million. As of last meeting was just over 4. It is moving downwards from various commitments. At the last board meeting the 7.1. Multiple commitments made. Right now the uncommitted is 3.75 and still moving. Don. Which Universities are absorbing 1 mill. Out of 2.4, 960,000 is PSU (40%), 22% is UO (530,000). Nearly 20% is at SOU (450,00). OIT has 322,000. OSU is 459,000. Geri. SOU has loan of 300,000 + 300,000+ another 320,000 loan. When loan was established, this sort of situation was not in play. How want to balance loan? George Pernsteiner - important thing was to establish tuition rates. Don. How much is absorbed by chancellorís office and how much goes back to campuses? Have to decide if that is where we want to be. Tim Nesbit. Make sure 15% is top increase on each campus. Henry. Could have a couple of alternatives laid out. Can defer for a bit on how the split is to be laid out. Relates to Fee Remission? Go to E-board? Don Blair. Have some agreement target - donít want 15% increase. Hard ceiling. Think costs 2.4 million. Leave to Universities and Chancellorís staff to deploy that. Have one open issue? How do we split the money. Leave for staff and move back to this in September.

Adjourned.

Meeting that was scheduled for August - this was going to be canceled - not be needed. Geri. Hope get enough done at this meeting not to have that. But it has been changed. It is still on.

ETIC Policy Package. Growing opportunity in Oregon.

Essential Budget Level: Tuition increase? Build into budget level. Comprised of general funds and other funds limited. Is way to set it up otherwise than as policy package? Concern yesterday was essential budget level assumes breakdown between tuition funds and general funds. Tuition number gets bigger and bigger as a % number. Want to have that grow no faster than growth in income level for Oregon Families? Is way to structure budget to reflect this desire. Bill McGee. Essential budget level is expenditure driven - specified to meet statutory requirements on how budget is built. What you are discussing is policy - would be policy package not essential budget level. Our question - what our essential budget level will be as submitted - combines general funds with other funds. Are we stuck with how that is allocated in past? Yes. Is very constrained targeted budget process. Previously was ìCurrent Service Levelî - politically incorrect number.

Tim Nesbit. I would like to see policy package to moderate tuition show cost in general fund dollars to limit increase to increase in income levels. That costs us 20,000,000. That would be clear. And make a clear statement that would be a policy goal and that is what it would cost. Moderating Tuition Increase - Access and Affordability.

Student on tuition mitigation proposal. Appreciate time Board has spent. Source of fund balances arises from students. Universities should maintain 5-10% rainy day fund. OUS Students have been meeting with legislators. Refund every cent of fund balances that you can will show legislators OUS students.

Motion to accept tuition mitigation plan. Motion carries. We are taking an important step with the motion just approved. Significant step in direction of more accountability to students -taking seriously need to mitigate tuition - do understand students think donít feel go far enough. Accumulating burden of tuition. Acknowledge feelings of students but also efforts of colleagues. Disinvestment of state in higher ed. Either get more money tuition, general fund, or start cutting classes and resources.

We need to go to the legislature as a unified front - bring people into our system and do it in an affordable way. Impress upon all concerned parties to impress upon legislature that we need general fund support - we have been forced into tuition increases. Frohnmayer. Reduce this to operational levels at the campus levels. Why are fund balances what they are? We are looking over a precipice. We have to make a payback of tuition dollars by Jan 5 2005 a very significant amount of money - a tax on tuition. Staring every campus administrator in the face. A fund balance at this point in time is only prudent. If underspend, governor takes money, if spend too much, is misdemeanor. Didnít use to be this way. Two things are very different. First is independent ability of State to give tuition - has been gutted. Oregon has shortchanged students in not giving financial aid to student. That is one of the causes - total financial aid - that part has been taken away. Other piece is role of tuition - reversed share that students and state pay. We donít know what our enrollment will be - need to save money in event enrollments fall short. 100 student shortfall is 1,000,000. We have lowest fund balance. Precariousness with which we are operating. Try to steer our way to financial stability.

Gretchen Schuette - same challenge those of us that run Community Colleges run share as well. Importance of us being connected with students. Like to request that board be specific about how we are going to continue to work with student leadership over the next month going into the legislative session. How we intend to follow up on comments working together before going to legislature. Brigette - are some implications with regard to fund balances in legislature. We need to change discussion about tuition that suggest when we think about how much Oregonians can pay and what they can afford. President OSU. We all have a more comprehensive discussion next winter about how all the pieces fit together. Henry. Have certain amount of money coming in. Two primary sources. Product we deliver is ability to educate a certain number of students. Biggest tragedy is what happens at U Wash. Reduce enrollment to keep quality up. Those are touch choices. Many variables.

Group MBF initiatives together. Governors has indicated criteria all agencies want to keep in mind as all requests go forward? If general expectation will get top 3 things on list or if really is going to be agency by agency request of priorities. Some sense of what happens might think about way package and prioritize things. Might not be viewed as cutoff - might be reduction in funding for each one based on relative priorities.

Governors expectations. Governorís representative encouraged us to give him full priority list and governor will decide whether he likes it or wants to shuffle it. This prioritization should not be definitive - not a mechanical process. How did we pick priorities and how do we see them fitting into things. (Note: The Governor is NOT at the meeting. Henry is chairing the meeting).

Discuss strategy to increase our odds of success in those things we think are most important. Then have strategy with the legislature. Henry. We were given the task of ranking these things. Start down the list. Which might represent erosion of core goals. Which are enhancements and which are protections.

ETIC: 22.1 million

Connecting Higher Ed to Statewide Student Service System 2.8 million MBF
Strategic Investment to Support Increased Student Access 1.18 million MBF
Removing Instructional Transfer Barriers to Students .409 MBF

Retaining Top Students in Oregon 2.5 million AEED
Faculty Recruitment 32.8 AEED
Student Enrollment Growth 1.47million + 17.7million other funds AEED

Health Care Work force 3.85

Moderating Tuition Increases 20. million

GS. We have been charged with 3 work groups. Current challenges of Universities to sustain access and affordability. Howard Sohn. Related to longer terms to addressing access and affordability goals. Need to create Oregon climate of support for higher education. Funding arena - have annual campaign for this.

Howard Sohn. I could make the case for any of them. Put student enrollment growth as #1. And put Faculty Recruitment as #2. Way to avoid erosion of quality. Get worried about us focusing too much about quantity as opposed to quality. That level is not achievable (#2). That has very high priority. And then find it a really tough call. Tuition moderation has a lot of merit. Also think MBF collection is a pretty close tie. Could also put ETIC first if look at lens of economic prosperity. Depends o what hat you put on first. Donít know what the priorities should be. What would fly. What legislature would be responsive to. Canít do them all. Should do the ones we can do successfully. Do on the grounds of salability.

Tim Nesbitt. Rate Funding Student enrollment growth in the full amount. Emphasize what our goals are. Greater number students graduating each year - each additional student carries cost 5/6000 additional above tuition they pay. Canít continue to do more with less. Look at last 12-14 years. Enrollment increased 20% and have less and less state support. Canít continue to educate students without more funding. Need tuition increase moderation. Maintain affordability. Avoid further increase in tuition beyond current capacity. We are the group that sets the price. Go above this level of personal income growth, make education less affordable. We set price. Another agency distributes discount coupons. Hope OSAC can boost the ability of middle and lower income students. This is where WE make the decision. Donít want to make things worse. For #3 rate MBF package. Represents good work. #4 is faculty recruitment - pretty high cost. ETIC #7. Struggling with magnitude of increase there.

Kirby Dyess. I support them all. Start with the basics. What is it that you canít not do. You have to do it. You know you have to do it. Student enrollment growth. Have to fund it at the level. Quality has already suffered. #2 Is Faculty recruitment and retention. Cut it in half. Have to do something. Freeze coming out. Other buckets of money. Put #3 the MBF group. Question the dollar amount. Have to do something there to get things going. Donít know if 5mil is right amount. Tuition moderation is #5. Top students - programs Universities already started - wildly successful program. Incredible payback. Put ETIC #6 because of the amount. Way beyond what seems realistic. #7 is Health care work force.

Don Blair. Principles we laid out. Rank principles. We have a crisis. Try to fix what you had before you add on top of it. What do we need to make system as efficient as possible. First ranking - how do we get system to generate output more efficiently. MBF. Donít think can put finger on each of programs and that is how we would do it. Putting money behind is not only indicator of support. Strong on objectives and drive accountability independent of initiative. Put resources behind. So MBF is #1. Maintain quality of system that we have. On boarding more passengers on a ship that is settling in the water is not a good idea. Put Faculty Salaries ahead adding more students. Bring more people into equation. Last item - new value creation opportunities whether Health Care, Honors Program, a lot of benefits will come. Two other criteria. Have to have confidence what we propose will deliver specific results. Have to make sure we sign up for actual execution. Leveraging private funds. Not clear to me to what degree funding sources are fungible. Capitol construction and ETIC. To what extent can Universities move funds around to drive agenda. List #1 MBF, #2 Faculty Recruitment, #3 Enrollment growth, #4 Tuition (might do that through financial aid), #5 Health care + EDTC.

Geri Richmond. I find this very healthful. I donít have to worry about Faculty Retention and Recruitment - that falls off the table. Areas of MBF. Retaining top students. Fold that into the other 3. That is the ìbetterî. Have provosts and campuses involved in this. Student enrollment growth. Put Health care as #3. Need to do something to encourage lot of kids out there that never envisioned a career at all. Window of opportunity. Have as #4 moderating tuition increases. Struggle with ETIC. I see value every day of faculty it is supported. #5 is ETIC.

Brigit. First priority is enrollment. Making sure bottom doesnít drop out. Second is tuition moderation plan. Buys us the opportunity to fund excellence, honors program. Those policies are great. Our legislature. We have fund balances. We have increased tuition 25%. Have to have positive step. Governors priority. Tying amount of living increase to amount tuition. If we do tuition proposal. Great for us and students. Lets us fund excellence. #3 is faculty. Pretty obvious. #4 is MBF. But have to be honest. Not positive about on the ground policies about those packages. Another component of access.

John. I looked at Governor had told us. We need to go back to Howards approach. We are negotiating against our selves. Follow through with 3 main charges. My first - canít go forward without student enrollment growth. Faculty recruitment and retention fits under excellence. We are way behind on that one. Not comfortable about talking about tuition as a separate entity. Our first symbolic request. Tuition moderation plan needs to be part of that. #4 has to be MBF. Are we ready with that? Have a lot of faith we will get this settled in the right way. Take a while to make it seamless. Retaining Top Students was #5 - focus on excellence. ETIC and Health care are equally exciting. Donít like putting them at the end. Highly support both of those. Howe do we present this as more just as against negotiating against ourselves.

GS. Fix what has to be fixed. Rank MBF #1. Student enrollment growth #2. Add more passengers to settling ship? Tuition moderation plan #3. Faculty recruitment and retention #4. Concerns in that - compensation for faculty and staff throughout post secondary education - how that can be presented in a fashion that really recognizes the context we are all in together. After that it is a lot more difficulty. Hope can find way to frame our support on these projects.

Henry. As look at prioritization principles from governor. Two struck me - access and excellence. Access is creating educational capability. So my focused on ability to develop to product attempt to deliver and make certain is of very high quality. Student enrollment growth is #1. Have to be able to provide an education for those that show up and does not diminish quality of existing programs. #2 Faculty recruitment is - way make great educational institution is to have great faculty. #3 Health Care Work force. #4 MBF. Also moves to development of additional product and delivery that has not been traditional. #5 Like everyone else - rest are all blended together - retain top students. Great enhancement of learning experience. Compete against others against the best students. Drives you beyond your capability. Support honors program. Additional. Next ETIC. ìAs a lawyer you should recuse yourself from everythingî. Put ETIC #6. Important program. Fund it at a lesser level. Hard to know number. But what we are going to be facing - that is one that should go forward at a lesser amount. Tuition moderation plan comes in last - every percentage point makes a difference, 20,000,00 and relation to other items. Need to work on legislature to understand obligation to turn balance between general fund and tuition to what it was historically.

President OSU. Priorities. We are here because Governor talked in November about ending disinvestment in Higher Ed. Access to quality education. Might be helpful in framing why you recommend things. Would be useful? Job 1 is to stop disinvestment in higher education. Which reflect investing in access in access. Which represent strategic investments for economic development. But that is a framework for thinking about how you ultimately get to a prioritization. What will resonate with governor and legislature.

Kirby. Governor has his priorities. We can tell him to get to how to get to each one of those. Up to him to decide which is more important. We have 3 different areas to focus on. He needs to decide which area is most important. If #1 priority is access - here is how to get there. If #1 is economic development - this is how to get there.

Howard. That was one of the implications. Instead of a ranking. Associate these with governorís priorities. Attach those kind of language to our communication. For strategic advance in the economy, these are the critical ones. That is prioritization that he takes. The point I wanted to make - I do think there has been a bit of a realization some of these proposals to move forward are great. Focus on what is new and generates new benefit. Reinvest in base is hard - prevent something bad happening. We have serious problem and are going to have something bad happen. Need to communicate - we have a very serious problem with what is here. Access - University of Washington. If want to add more students? We canít properly service student have at present. Lack of money to do things are doing at present. Buildings falling apart. If we believe stopping the erosion is the #1 priority, we should say so. The existing structure is not going to continue the way it is. A few things we need before start talking about new initiatives. How we craft the communication. Once we come to some conclusion, we may have to delegate to a subcommittee the crafting of the communication we can all sign up for.

Disinvestment was #1 (Student enrollment growth donít want further) and #2 was faculty recruitment area. Perhaps we stop there. Stem the disinvestment these are the tops. And then follow up with packaging the others - difficult to prioritize further. Hear from Presidents about stop the erosion category.

OIT. I think particularly in the base funding funding for student enrollment and right next to that is quality faculty. In area of MBF. We can truly develop programs have return on investment. Still a challenge. Spent many years in many arenas. That is going to take a time period. See phase in. Overall - getting students in your programs so they can go out and be successful citizens. Tremendous market need in our economy for certain kinds of educated people. If forget about that, here is a disinvestment piece. What are we doing to educate citizens to educate for the economy. Not turn away students in specific programs that are critical to economy of Oregon. We turned away 150 students to health care programs.

EOU. Bring in tuition moderation as illustration of enrollment. See tuition dealing with two largest cogs in wheel in engine. Discussed with enrollment. Two most generally addressing disinvestment. With regard to others - have to recognize health professions even not broadly based - avoid train wreck that effects health care environment - issues of escalating costs.

We have two categories when talk to governor. Disinvestment and Investment. Need to take results and put them into two categories. Put each into 3 priority areas governor has already asked for. Communicate these have already been culled from many other selections. The ones that hit the parameters. Address dollars. We donít want to give up on any of these.

We want to put these all forward. How will we package these. Put closure around this. We are talking about communication to the Governor and all the other constituencies. Staff has what they need to go have go forward.

George. Came to some close consensus. Providing stability, student enrollment growth, faculty growth and retention, tuition moderation. All part of holding together. 3 of top 4 were those. Let us keep what we have. Had Category A. Those would fit within those. Then had a group of proposals that dealt with doing what we already do better. Better at what we do. Final group (ETIC/HEALTH CARE) let us do something more. Different from that we have done before. Three different categories. Pretty well within those - build base. Next is doing better what we are already doing. Third is doing some different. If that works for you as a rough categorization. Kirby. All are either keeping basics intact or building on what we already have. May be moving towards - stop the disinvestment. Second category is developing additional capability. Craft our language around that. As look at MBF. That is quite different from ETIC and HEALTH CARE. That is increasing number of graduates in that field as we know we are going to need that. MBF is about raise bar for everyone. Much more efficiency between 3 different educational systems.

Have to demonstrate why we need to do more with more. Only piece that relates to faster - that is MBF. We are funding ways to get the students through the system faster. Terms like disinvestment and investment are hackneyed. I have been beaten up over 8 months here over not focusing on quality. Show faster with quality. It is our credibility with the legislature. We are demonstrating. Let small group work this and come back.

Henry. Ready to adopt motion submission of policy packages to governor. Have 80.3 in docket. yesterday 83.8 as amendment to docket. Reduce data package. In addition to that have additional package for 20 million. MBF package. Discussion to add back 1.25 in matching funds from chancellors office. Comes to 105 mil general fund, proposed reduction of 3 for retaining students. Reduction of tuition of 20 mil from tuition moderation package. Changes other funds limited to 5.5 million. Submit to governor policy package as submitted by staff.

Approve 10% reductions.

Administrative changes to OARís concerning financial powers of the board.

Chancellorís office reorganization - Provostís council. Need to get that rolling. Need to give someone the authority to approve new academic programs. Delegation of authority from Board to Provostís council. Charge of OUS to Provostís council. Authority to approve academic programs. GS. Are there differences between what is delegated to Provostís council as opposed to old Academic Council. I as board member have struggled with how to implement charge of MBF. Also community college and K-12 are uncertain to relate to system in academic affairs arena. Are there things missing in this delegation from what used to be to Academic affairs.

This charge mirrors authorities that were within Academic Affairs. Earlier discussions were limited to undergraduate programs. In this charge - all proposed graduate programs will be brought to Provostís council concurrently.

GS. Virtually every week one from other 2 sectors of higher ed asks - to whom do I direct my question. Who do I work with. As a board member. I want to get support for my work with Provostís council. Address with OUS system - go to Provostís council. The remaining details are to be published will be done by Provostís council as dealt with in #6. The name right now is Lorraine Davis. Want this to be publicly understood - lots of questions. Encourage colleagues to talk to Lorraine. Motion - ok charge document. Passed. See attachment

Annual report on diversity.

Presentation on the capitol budget including deferred maintance.

IFS report - very brief. (the time was late and several members of the board had to leave). Report by IFS President Gilkey: Quality is the word we stressed in our discussion with the board yesterday. We felt it is crucial put the responsibility on the students. Linked to that is our work on the board initiatives. Bob Turner has formed an IFS task force to deal with retention, advising, and time to degree. Maureen Sevigny chairs the IFS task force on the common core. Concerning the common core. We met with several of the Provosts yesterday and are working to have something concrete to present at the October meetings on all the OUS campuses. We will make it happen. We are grateful for the the board initiative on faculty salary.

Director Richmond then indicated her grattitude for the faculty efforts.