The Board's Committee on Budget and Finance met concurrently, dealing with some land purchases at OIT and PSU and some amendments to the optional retirement plan necessitated by new federal tax laws. There was also discussion on the OUS Fiscal Accountability Framework (but since I wasn't there, I can't tell you what that discussion was). I learned after the fact that the most time-consuming item was discussion of the fiscal status of intercollegiate athletics wherein Board members closely questioned OSU representatives about OSU's inability to reduce its athletic deficits according to the schedule submitted to the Board in March 2000. Figures supplied with the agenda for the meeting indicate that a 1999 schedule would have had OSU fully eliminating the deficit by June 2005. That schedule has been revised several times; current figures and estimates point to a need for huge fund raising efforts to generate a needed surplus of $0.9 million this year to meet the targets. OSU officials are predicting an $0.8 million loss, however. PSU and U of O have eliminated their deficits. Board members were rather disturbed that OSU was not meeting commitments.

The Board holds three meetings subsequent to the subcommittee meetings (and I don't really understand the system): the Joint Budget & Finance and System Strategic Planning Committees (JBFSSP), the Committee of the Whole (CW) and finally, the actual public State Board meeting (OSBHE).

At the JBFSSP meeting, directors heard an OSU shortfall analysis by the accounting firm hired to try to figure out what happened. Accountants discovered a $5.9 million inclusion in the $19 million that shouldn't have been there OSU business office staff had incorrectly included roll-up costs of programs twice. The accountants then broke the remaining $13.2 million into obligated versus desired expenditures. When they took out the desired expenditures, the shortfall looks to be about $6.8 million. Board members questioned this division of expenditures, asking for examples of each type. Rewiring of buildings was an example of an obligated expenditure as contracts have been signed; faculty salary increases, promised scholarships etc. were classified as desired. Cutting desired expenditures was characterized as disdainful and painful by OSU folks they are things that could be done if needed. President Risser was quick to point out that none of the desired expenditures have been cut at this point. This exercise was just a means to get a handle on the size of the problem. He's hoping revenue sources might be identified to cover these. President Risser also gave a 6-month financial report at OSU.

Action on budget rebalance was postponed due to the special session to begin Feb. 25, 2002.

The Board is also beginning a review of tuition policies. Loren Stubbert of the Chancellor's office provided background on current policies and some possible strategies. Within his report to the JBFSSP, he asked Provost Mosely (UO) to outline the proposal we heard about at the February IFS meeting wherein tuition would be reduced for classes later in the day and the tuition plateau would be shortened to 12 15 credits. The Board will be delving more deeply into tuition policies at upcoming meetings.

Finally, at the JBFSSP meeting, President Risser talked about OSU's vision of itself for 2007. He spoke of the need to increase its annual operating budget by $20 million to $30 million to become one of the best universities in the nation. Such an increase would fund RAM cells at 100%, afford competitive faculty and staff salaries and provide more need-based and merit scholarships. To increase the budget by $20 million to $30 million, OSU will increase private funding, increase revenue from core and perimeter programs, technology transfer, research etc and streamline operations. He asked the OUS to support the effort by recognizing OSU's distinctive mission, providing more flexibility and exploring alternative arrangements between OSU and OUS. He didn't elaborate on these.

At the Committee of the Whole, which is the entire Board but is not the actual publicly announced full Board meeting, a panel of presenters discussed broadening the system's participation in Oregon's economic development with Board members. All felt the system needs to be more proactive in supporting economic development. Because I had to leave through part of the presentation, I didn't catch all remarks but one presenter noted the position description for the new chancellor barely recognizes that role for the chancellor. Another remarked that good academic departments don't contribute to economic development; great (italics mine) departments do. The consensus was that the system must be involved in trying to turn the economy around.

The "real" Board meeting began about an hour late and they quickly ratified actions taken earlier in the day at committee meetings. Dr. Cox reported on the chancellor search, saying the pool has grown to over 50 applicants and the search committee is very optimistic about the quality of the candidates. He also mentioned that Roger Bassett, Geri Richmond and (I think) Phyllis Wustenberg are part of the search committee for the new WOU president. (Our own Bob Turner is also a member of that committee.) Dr. Cox noted he'd be meeting with Dick Wendt, the person offering the $75 M to OIT if OIT leaves the system. He's talked with consulting firms who've dealt with these types of issues to gain background in the public policy concerns surrounding the offer.

Grattan Kerans reviewed the status of the budget rebalance old news as I write this. I gave my report and the OSA representative was absent due to a conference she and others were attending. There were a few reports from Board members on various items college savings plans, liaison with OHSU, the Oregon Council for Knowledge and Economic Development (OCKED) and the citizen engagement plan.

The meeting adjourned at 3 p.m. Board members do yeoman service as they were in session from 7:30 am to 3 pm without a break (though several tiptoed in and out as neededÉ).