Report on Board Meeting 18 October 2002

Bill Danley and I both attended the Board meeting at SOU. Bill attended the Budget and Finance (B & F) Committee meeting; I sat in the meeting of the System Strategic Planning (SSP) Committee.

The B & F committee accepted the revised 2002-03 operating budget which then went to the full Board; the committee also approved the PSU purchase of property in Portland and a new agreement with the Portland Development Commission both sent to the full Board as well. Limitations were increased on the cost of building the Hinsdale Wave Research facility at OSU and the library at SOU and a 2002-03 travel reimbursement policy was approved. The committee heard the regular reports on the OSU operations and athletics budgets. The SSP committee endorsed (and sent to the full Board) the principles of the Oregon Student Assistance Commission's (OSAC) plan to seek enhanced funding for the Oregon Opportunity Grant in the 2003 legislature and a commitment to extend the value of those grants in future biennia. A certificate program at OHSU and a new B.S. degree at EOU were approved as was a legally-mandated nomination to the Forest Research Laboratory Advisory Committee at OSU. And the committee noted that the strategic planning working group is aiming at a 6-month horizon on finalizing a strategic plan; the first priority is the legislative discussions surrounding "The Deal" but decisions will be made soon on access, tuition and the like.

Because the Board wanted to devote a good portion of its meeting to a work session on the Biennial Operating Budget, the Strategic Planning Work Group report and the recommendations from the Oregon Council for Knowledge and Economic Development, there was neither a Committee of the Whole nor a Joint Committee meeting. The Board meeting began with remarks from President Lussier, who acknowledged significant contributions from faculty and others on several campuses; he also invited Jay Casbon, Cascades Campus executive, to give a short report on enrollment and programs there. Chancellor Jarvis, in his report, summarized his town meetings at which he's outlining "The Deal" to campus and off-campus audiences. If he hasn't made it to your campus yet, he soon will. Acquaint yourself with this package of proposals and the approach he'll be taking with the legislature; there will be some major changes in the way business is done in the system if the legislature goes along with the system's requests (there is some doubt that the legislature would be willing to give up some of its power).

The new OSA chair, Rachel Pilliod (who's also the student body president at U of O) spoke at length on the tuition surcharge and its implementation and on the tuition proposal in the flexibility initiatives that are central to "The Deal". OSA is asking that levying and refunding procedures (should the income tax surcharge pass in January) for the tuition surcharge be worked out with the students in advance of winter term. The students are also quite concerned about the plan for tuition to be determined by the individual institutions within a range set by the Board and that the legislative check on tuition increases will be missing; students feel they will lose their chance to influence tuition by lobbying the legislature. Ms. Pilliod remarked that raising tuition won't solve OUS' problems and that rates should be annually revisited. She also pleaded for increased financial aid, especially for the neediest but took exception to the notion that tuition be raised so that a portion of income from tuition could be set aside for financial aid. She closed her remarks by noting that students hadn't been consulted in the development of "The Deal" but hoped they would be as it would be beneficial to both the system and the students to be involved. The Board next moved to its work session to which both Rachel (OSA) and I were invited. Tom Anderes, Vice Chancellor for Finance, reviewed the budget situation for 2002-2003: (taken from his PowerPoint presentation)

A lengthy discussion about the components of "The Deal" and the flexibility initiatives followed. Roger Bassett, as chair of the SSP work group, gave context to the group's work and outlined the planning assumptions from which the flexibility initiatives and "The Deal" were developed. He noted that the group has not yet answered some important questions: "What is the state's responsibility to higher ed.?", "What is the status of state control over higher ed. in light of reduced support?" and "Who keeps the doors open if the state won't?" President Zinser (SOU) pointed out that concepts like quality and competitiveness aren't explicit in the planning assumptions but, rather, are concealed in the statement "State funding over the next few biennia is not likely to support a fully-funded RAM"; she asked that declining quality and competitiveness by openly stated as an assumption. Chancellor Jarvis revealed his vision for the system: (taken from his PowerPoint presentation) He continued by outlining what he sees as the problem with current approaches to funding. Funding has dropped so low that RAM principles are compromised, the balance between state support and student tuition is ever changing and the system and the state are in an adversarial relationship that results in conflicts between access and quality. The state gets the access card, promising, but not funding, a college education in a system institution for all qualified students. The system gets the quality card, leading to whining about how quality is deteriorating. The legislative response is "we really want to help out but there's not much money we'll do the best we can". Chancellor Jarvis argues that RAM funding is a quality index for the system and "The Deal" is based on the state and system agreeing that RAM funding can fall no lower than 80% of peer average state funding. By 2007-2009, that figure would be 90%. He further proposes that resident undergraduate tuition and educational fees be capped at less than or equal to the amount the state invests in resident undergraduates and increases would not exceed the inflation rate in the higher ed. sector over any 3-year period. Under "The Deal", campuses could accept students over and above those supported by the general fund by using tuition income, savings from the flexibility initiatives and monies from entrepreneurial activities. He suggests the bargain the system would make with the state is there is no way to meet unmet demand students not supported by general funds or institutionally supported except by increasing state support or institutional support; letting the RAM cell funding fall below 80% is not an option.

Geri Richmond expressed concern about who is held accountable if RAM funding does fall below 80%? What consequences, she asked, did the system envision if the legislature doesn't fund the RAM? Essentially, Chancellor Jarvis is saying that we'll take less students but I (now inserting my thoughts) wonder if schools will be able to resist taking students over and above state-supported students for the revenue they provide through tuition. Bill Danley, in an aside to me, wondered "who" the system will be "shaking hands with" in consummating this deal? The governor? The legislative leadership? This is a multi-biennia plan; how does the system get whoever we "shake hands with" to live up to commitments? Chancellor Jarvis noted that the combination of state investment and student tuition and education fees doesn't alone make a viable solution; the system needs the additional efficiencies that adopting the flexibility initiatives would provide.

The Board, presidents and others then discussed the proposals for more flexibility which "aim to enhance university responsiveness to demands of students and others, meet the educational and economic needs of the state, permit campuses to pursue mission distinctiveness and expand capacity while maintaining Board accountability, and transform existing state regulations or Board policy to save money and time". (Quoted from the PowerPoint presentation made to the Board.) A Board Accountability Provision was listed for each initiative; the Board must retain its oversight responsibilities especially if the legislature gives up some of its responsibilities to oversee higher ed. Flexibility initiatives in the fiscal operations and management area didn't engender much discussion. Those regarding tuition and fees raised some issues. In absentia, Phyllis Wustenberg (through Roger Bassett) indicated she opposed the idea of increasing tuition to support financial aid she felt it isn't appropriate for some students to support others (a view echoed by OSA Chair Pilliod). No one disputed the need for additional aid; the sources were in question, however. Some assurance was sought (by whom, I didn't note) that the proposition that a campus can enroll additional Oregon residents beyond the number agreed on to set the quality level at 80% wouldn't in fact dilute quality and competitiveness. Academic initiatives would permit campuses, with Board approval, to establish/expand academic programs based on market demand, academic priorities and available resources through a streamlined approval process. Exemption from program review by the Office of Degree Authorization would be sought as well. Among the fiscal operations and management initiatives is one suggesting exploration of OUS self-insuring for health benefits and looking at alternatives to PERS. Jim Lussier closed the discussion by urging the Board to make its goals clear so the planning process has a focus, to educate politicians on all aspects of higher ed.'s importance, to create and identify internal trends and things that it could do on its own to move higher ed. forward, and to work on setting financing goals which should be aggressively pursued.

Roger Bassett remarked that the SSP must decide how the RAM model fits with the flexibility initiatives the two must be reconciled in some manner. The Board then heard a summary of the work of the Oregon Council for Knowledge and Economic Development a council legislatively mandated to increasing high quality research and development in Oregon, to increasing technology transfer and commercialization of knowledge, to providing capital for technology developed by higher ed. and other institutions to be commercialized and to promoting development of a technologically skilled workforce. Since higher ed. is one of the key players in completing its mandate, the Board is regularly briefed on the Council's work. The Council will present an interim report to the Governor by the end of 2002. Thus far, the Council has developed the following recommendations: (taken from the PowerPoint presentation)
 

  • Direct mission and functions of the state boards of education, OHSU and Oregon Economic and Community Development to reflect the importance of the knowledge economy
  • Establish nationally-recognized "Signature Research Centers"
  • Provide adequate funding for the Higher Ed. Technology Transfer Fund
  • Increase investment and presence of institutional venture capital firms in Oregon
  • Enhance the depth of management and entrepreneurial capacity
  • Immediately enhance skill level of incumbent workers and the education and training capacity to fill high-demand knowledge-based jobs
  • Actively support efforts that significantly increase capacity in engineering, technology and science programs and the number of state engineering, technology and bioscience degrees
  • Enhance the number and availability of science and technology degrees through full articulation and access to e-learning
  • Increase student interest in science and technology fields and careers
    • The Board concluded its meeting by approving the action items brought to it by the B&F and SSP committees. There was no public input at this meeting. 
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