Arizona Board of Regents-Minutes

Present:	Regent Fred Boice Regent Robert Bulla Regent Ernest Calderón Regent Dennis DeConcini Regent Fred DuVal Regent Edward Hermes Regent Anne Mariucci Regent Christina Palacios Regent Gary Stuart Regent Mary Venezia Superintendent Tom Horne (present November 30 only)
Absent:	Governor Janet Napolitano

Also present were President Robert Shelton, Ms. Edith Auslander, Mr. George Davis, Ms. Judith Leonard, Mr. Joel Valdez, and Ms. Carla Nunn, University of Arizona; President John Haeger, Dr. Elizabeth Grobsmith, Dr. M. J. McMahon, Dr. Kathe Shinham, and Mr. Mark Neumayr, Northern Arizona University: President Michael Crow, Dr. Christine Wilkinson, Mr. Paul Ward, Mr. Rich Stanley, and Dr. Elizabeth Capaldi, Arizona State University; Executive Director Joel Sideman, Board Counsel Nancy Tribbensee, Secretary to the Board Peggy Martin, Dr. Art Ashton, Ms. Kathy Bedard, Mr. Michael Hunter, Ms. Stella Galaviz, Ms. Cathy McGonigle, Ms. Stephanie Jacobson, Mr. Mark Denke, Ms. Anne Barton and Mr. Dan Anderson, Central Office; and Dr. Marcus Ford, Arizona Faculties Council

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the November 30 and December 1, 2006, Documents Files.

Regent Mariucci led the Pledge of Allegiance.

Regent Bulla welcomed everyone to the last board meeting of 2006. Regent Bulla congratulated Superintendent Horne on his re-election.

ERNIE NICKELS: representing the Daley Park Neighborhood and the University Park Neighborhood. Mr. Nickels stated that they had been working with ASU on this project and it has been a good experience. Many issues have been discussed and resolved. There are only two unresolved issues which consist of the south side balconies and the two-way traffic on McAllister. Mr. Nickels stated that he believed there should be continuing meetings with the university and the neighbors to make certain everyone is given necessary information.

MARIA BAHR: a member of the University Park Neighborhood. She stated that she does not like the idea that a huge parking garage is going in this area and she encouraged the Board to think about what is being built here. She stated that she does not want more cars in the neighborhood.

GREG ELLISON: a member of the University Park Neighborhood. He stated that he has had a good experience working with ASU and the developer. Non-students living in this structure are something the neighborhood is concerned with along with the 12-month lease.

MICHAEL R. RUPPEL: a member of the University Park Neighborhood. He wanted to discuss the concerns of the neighbors regarding the tenancy issue. The neighborhood is concerned about non-students living in this structure.

DIANE PALMER: lives west of the ASU project. Her concern is about the overall scale of the project and the parking garage.

Regent Bulla welcomed Jaclyn Cimino, a UA sophomore who just turned 20. An injury in high school resulted in the need for Jaclyn to use a wheelchair. Since her injury, she developed her tennis skills to become: the 2005 U.S. Open Women's Singles Champion, the 2005 U.S. Open Women's Doubles Champion, the 2005 U. S. Open Junior Girls Champion and the 2006 U.S. Open Mixed Doubles Finalist. Jaclyn is a top athlete and scholar with a 3.4 GPA.

Jaclyn Cimino told her story. Her spinal cord was damaged in an accident when she was 16 years old. She was introduced to wheelchair tennis during her rehabilitation. She was introduced to the UA Wheelchair Tennis Coach at the U.S. Tennis Open and was recruited to play tennis for the UA. The UA Adaptive Athletics program provides students with disabilities the opportunity to participate in the experience of higher education and team sports. Jaclyn stated that the University of Arizona is a very wheelchair friendly campus. It is a campus with no barriers.

President Shelton distributed information about the University of Arizona's adaptive Athletics’ program.

President Shelton introduced Vicki Chandler, who is a member of the National Academic and the Director of BIO5. President Shelton stated that he has asked Dr. Chandler to share the spotlight with the people who work with her and reflect the integrative approach the university has to scholarship and learning. Dr. Chandler thanked the Regents and stated that the TRIF funding has been essential to the building of the BIO5 program. The funds have helped us bring new faculty to the University of Arizona. Dr. Chandler then introduced Dr. Felicia Goodrum. Dr. Goodrum exemplifies the quality of faculty we have been able to recruit here. She is a member of the Department of Immunology. She has a joint appointment in BIO5 and the Arizona Cancer Center. Dr. Goodrum received her PhD from Wakeforest and her post-doctoral degree from Princeton University.

Dr. Goodrum discussed her research. The focus of her research is on the CMV virus. This virus can cause life threatening damage to people with weakened immune systems and it also causes birth defects. Dr. Goodrum hopes that her research will end up producing a vaccine for this virus. As individual scientists our expertise is very limited, however, as a collective collaborative body of scientists our expertise is limitless. This is what BIO5 is.

Dr. Chandler then stated that BIO5 has three missions which are to promote interdisciplinary research, translate that research to real world applications and train our students in cutting edge interdisciplinary research. Dr. Chandler then introduced Tiffany Bialis, a student, who is performing interdisciplinary translational research as she is working toward her PhD.

Ms. Bialis discussed her research which is directed toward the prevention of cancer spreading. Ms. Bialis recently received an award from the Department of Defense which provides her with a three year fellowship regarding breast cancer.

Items on the Consent Agenda that are marked in these minutes with an asterisk (*) were considered as consent matters and were unanimously adopted upon the motion of Regent Stuart, seconded by Regent Hermes.

The August 10-11, 2006, Executive Session minutes and the September 27-28, 2006 Regular Meeting minutes were approved.

*Authorization to Approve a Continuation Award from the Jet Propulsion Laboratory (JPL) #957624 (ASU) (Agenda Item #6)

The Board approved Arizona State University's request to accept a continuation award from the Jet Propulsion Laboratory (JPL) #957624. The proposed amount of the amendment is $41,945,622.

The Board approved Arizona State University's request to accept a continuation award from the NIH-NHGRI. The proposed amount of the amendment is $1,489,498.

The Board approved Arizona State University's request to accept a continuation award from the NSF-EHR. The proposed amount of the amendment is $1,246,479.

The Board approved Arizona State University's request to accept a continuation award from the NIH-NIA. The proposed amount of the amendment is $1,181,564.

The Board approved Arizona State University's request to accept a continuation award from the NIH-NIAID. The proposed amount of the amendment is $1,404,052.

The Board approved the revised FY 2007 budget for Arizona AHEC. This revision was necessary due to the receipt after the June 2006 approval of the budget of FY 2006 State Lottery Funds, pursuant to the Healthy Arizona 1 initiative measure passed by Arizona voters in 1996.

*Report on High School Students Taking University Courses in 2005-2006 (Agenda Item #19)

The Board reviewed the statutorily required annual report on students under the age of eighteen who had not attained a high school diploma or high school certificate of equivalency and who were enrolled in a university for credit during the period of September of the previous year through August of the current fiscal year.

*UA Bookstore Information System Project (Agenda Item #23a)

The Board approved the University of Arizona's request to acquire an internal operating control and POS system for its bookstore.

The Board approved the University of Arizona's request to acquire and install devices to add remote management capability.

*Revised Project Approval with Budget Increase: Arizona Biomedical Collaborative 1 (ABC 1) Building (ASU) (Agenda Item #36)

The Board approved Arizona State University's request for Revised Project Approval with a budget increase for its portion of the Arizona Biomedical Collaborative 1 (ABC 1) building at the Phoenix Biomedical Campus in downtown Phoenix. This project will construct an 85,600sf research and laboratory facility at a total revised estimated project cost of $30.2M. ASU’s portion of this project will increase by $0.6M to a total of $13M. The University of Arizona will contribute $17.2M to the construction of the facility. This project will be funded by the sale of $29.6M in Certificates of Participation (COPs), with debt service funded by State Research appropriations beginning on July 1, 2007, and by $0.6M in ASU local funds to cover this budget increase. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved Arizona State University's request for Revised Project Approval with a Budget Increase for its Instructional/Research Laboratory Renovations Phase II project at a total revised estimated project cost of $20M. ASU has identified 3 additional projects: ISTB V Renovations and Infrastructure Code Compliance; Whitaker Design/Resource Center Phase II; and Engineering Research Center Upgrades Phase III. This project will be funded by the sale of System Revenue Bonds, with debt service funded by tuition, Indirect Cost Recovery, and other local funds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved Northern Arizona University's request for authority to sell System Revenue Bonds to refinance all or a portion of its $56M principal amount in Series 2002 and Series 2003 System Revenue Bonds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved Arizona State University's request for authority to sell Lease Purchase Certificates of Participation (COPs) to refinance all or a portion of its $93.1M principal amount in Series 2002 Lease Purchase COPs. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved Arizona State University's request for authority to establish a fixed rate of interest on all or a portion of its $103M principal amount in Series 2003 Variable Rate System Revenue Bonds by either (a) selling fixed interest rate System Revenue Refunding Bonds to refinance all or a portion of the Series 2003 Bonds; or (b) entering into a fixed pay interest rate derivative agreement in association with the Series 2003 bonds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved Arizona State University's request for authority to transfer certain United States Department of Education (USDOE) deed restrictions from 5 parcels of real property on the ASU Polytechnic campus to 2 parcels of real property on the ASU Tempe campus upon which Lattie F. Coor Hall and Life Sciences Tower E-Wing buildings are situated. USDOE has requested a formal Board resolution for this transfer. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved Arizona State University's request for authority to apply to the United States Department of Education (USDOE) for acquisition of certain real property and improvements immediately adjacent to the ASU Polytechnic campus and now known as the Williams Community School. Estimated costs of operating the facilities will be $80,000 in FY 2007; $84,000 in FY 2008; $88,200 in FY 2009; and $92,600 in FY 2010. In addition, ASU estimates that it will incur a one-time capital improvement cost of approximately $148,000 to make the space usable for ASU programs. The application to USDOE requires this formal resolution by the Board. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

The Board approved the University of Arizona's request for authority to sell System Revenue Refunding Bonds to refinance all or a portion of its outstanding $283.4M principal amount of System Revenue Bonds; and to sell Refunding Certificates of Participation (COPs) to refinance all or a portion of its outstanding $520.9M principal amount of COPs. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Regent Calderón chaired this portion of the meeting.

Regent Calderón discussed the change that has occurred regarding approving tuition in the fall to assist people with preparing for any changes in the tuition. He further talked about the outreach to students, parents and alumni groups. He stated that parents and alumni were most concerned with affordability, accessibility and predictability. Parents recognize that there is a lack of funding on the part of the legislature.

Regent Calderón then had the student leaders introduce themselves. Present were Eric Norgard, the president of ASNAU; Paul Thorne, GPSE president; Erin Herzog, student body president at UA; Ross Meyer, undergraduate student government president at ASU-Tempe; Dan Malin, student body president, ASU Polytechnic; and Jessie Peterson, student body president, ASU-West.

President Shelton stated that the University of Arizona proposal for tuition and mandatory fees was appropriately scaled. He stated that he believed it represented an extraordinary value for the money. President Shelton stated that he had proposed an increase in resident undergraduate tuition of 6.5% at the main campus, 4.9% increase in resident undergraduate tuition at UA South, an increase of 8.5% for non-resident tuition and a $65 increase in the library fee, which represents the second half of a two-year proposal for a $130.00 fee.

President Haeger stated that Northern Arizona University had extensive discussions with students and staff and has tried to come up with a recommendation that is geared to increasing quality and the student experience. He stated that NAU has said to the students and the state that this is the amount of money it is going to take to have a high quality academic institution. President Haeger stated that he had proposed a 7% increase for all students, resident, non-resident, undergraduate and graduate except for students in the undergraduate statewide programs and at Yuma who would have only a 5% increase. NAU is also asking for an increase in the technology fee and a student recreation fee of $25.

President Crow stated that Arizona State University's principle for all tuition proposals are built on three fundamental aspects - all critical to the university's success. First, they are built on the assumption of the co-investment model where the state invests in the university, the student invests in the university, the community invests in the university and the private sector invests in the university. Second, a model built on access through an over-all structure of moderate tuition with high financial aid. The third part of the model is student success. There is $11,800 available from tuition and state allocations per student. That number is below the cost of providing an education. Other similar universities have between $18,000 and $26,000 per student available. President Crow stated that Arizona State University has established a target of resources available per student of $15,000. He stated that he believes that the university needs to have that level of funding to implement its strategic plan and vision. He further stated that he believed the tuition should move to $6000 per year and he will continue to move toward that tuition. That is a moderate tuition on a national basis and that is a level of tuition from which the university can continue to drive its access model and make certain that students eligible for Pell Grants will increase in numbers and the actual cost to students will go down as we have demonstrated. State investment needs to move to $8000 per year per student. The other $1000 will come through private endowments.

President Crow then stated that his tuition request this year was for 7% for undergraduate, resident and non-resident; 8.5% for graduate students, resident and non-resident and a $100 technology fee.

Regent Calderón stated that the Board was being asked to approve a mandatory fee of $65 library fee at the University of Arizona, an increase in the technology fee of $1.00 per credit hour at Northern Arizona University, a $50 student activity fee for Northern Arizona University students attending the Flagstaff campus, a $100 mandatory technology fee at all Arizona State University campuses and a $50 recreation fee for Arizona State University Polytechnic and West campus students.

Regent Bulla stated that because of many questions that were being asked regarding the mandatory fees he intended to make a motion to table the mandatory fees until the next meeting to give the Board an opportunity to gather more information.

Upon motion by Regent Bulla, seconded by Regent Palacios the Board approved tabling the mandatory fee requests until the January Board meeting with a roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes, Superintendent Horne and President Bulla. Against: None.

Regent Calderón then stated that the Board was being asked to set resident and nonresident base tuition rates for the 2007-2008 academic year.

Regent DeConcini then stated that he would be making a motion on behalf of himself, Regent Hermes, Regent Calderón and the students at the universities.

Regent Hermes spoke in favor of this proposal. A few years ago we saw tuition raised quite significantly. Presidents and others pointed to the fact that there was less funding coming from the legislature. The students understood this and agreed to take on the cost with the hope that in years of surplus that more money would come to the universities and students would get a break. This year students deserve a break. Students do not want to stand in the way of progress, they just want to give the legislature a chance to fund the universities and if the legislature does not come through the students would fund the burden. Regent Hermes stated that he believed this is the right thing to do while revenue projections are up. We need to strike while the iron is hot.

Regent Boice spoke in opposition of the motion. He stated that he applauded the students for what they have done. He stated that he does not want to abdicate the board's responsibility to set tuition, but he is concerned with how the legislature may allocate funds. The students did set the infrastructure money aside but the Board needs to keep in mind that for debt financing all of the tuition goes to the state and there is nothing that says the state has to give the money back. He stated that he was concerned that the legislature could interpret this strategy as threatening and no one knows how they would respond. Further he stated that he feels it is important to tie tuition and financial aid together. Regent Boice stated that he if this motion failed he had a compromise motion.

Regent Venezia spoke in favor of the proposal. She stated that the students understand that if the legislature does not step up to the plate, the students are willing to pay what the president's propose. She believes that the Board should be willing to give this proposal a chance.

Regent Mariucci stated that the Board's job is to protect and sustain the overall financial foundation of the universities which comes from multiple sources. She stated that she commended the students for a very thoughtful proposal. The students have recognized the powerful voice they have when they band together and if they organize and bring this force to bear at the legislative session regarding full and fair funding that the universities deserve, you will be heard. Regent Mariucci further stated that she was concerned that there would be unintended consequences to this proposal. She stated that she would not be supporting this proposal at this time.

Regent Stuart stated that he cannot support this proposal. For the last seven years we have tried to link tuition with financial aid. There are two issues: state appropriations and tuition. Appropriations are the responsibility of the legislature and tuition is the responsibility of the Board. The legislature is unpredictable in what message they are going to believe that we have sent. He stated that he is afraid we will end up having to negotiate with the legislature and they will perceive this proposal as a threat. The Board policy states that we will maintain tuition at the top of the bottom one-third and we give that up in its entirety if we decide to back away from that policy and instead negotiate dollar for dollar appropriations with tuition. He stated that he does not want to see us negotiating with the legislature in the spring. He further stated that tuition was linked to financial aid and he believed that this process would unlink them.

Regent Palacios stated that she will not be supporting this proposal for all of the same reasons that have been previously stated. She stated that she admired the students for their creativity and the risk they were willing to take.

Regent Bulla stated his appreciation for the way the students worked together. He further stated that he would not be able to support the proposal for the reasons previously stated. Regent Bulla believed that the Board would be abdicating their responsibility if they did not set tuition. He further stated that he hoped everyone realized how much effort and work the Regents do in regard to this matter.

Regent DuVal stated that he believed that this proposal had provoked discussions at the legislature and that it, hopefully, will make a difference in the future. He was impressed with the work the students have done. Regent DuVal further stated that he believed that whatever the Regents do, they must expressly tell the legislature and the executive branch that the Board's expectations are that they need to fully fund the 2 to 1 ratio of AFAT. There obligations are very specific.

Regent Calderón stated that he believed that the students had done exactly what the board asked them to do. The Board has asked that the students factor in the cost of benefits and do it in an analytical way. The students have advanced a very meritorious proposal and have done a very good job of trying to find another way to approach this issue. Regent Calderón stated that he was in favor of this proposal.

Regent Hermes again stated his position in favor of this proposal. He stated that he believed that this proposal would go along way in making students major players in the future.

Regent DeConcini stated that the students have done a great job. The students will be bearing the burden here if the Legislature does not perform. The students are taking the risk with this proposal; the Board is not taking the risk. Regent DeConcini stated that he felt we should have the courage to say to the Legislature do your job or the students will have to pay more. This is an opportunity for the Board to not back away. He keeps hearing that the Board is not willing to do this because they do not want to offend the Legislature. He stated that he felt the Legislature would welcome this opportunity. There is no risk to the Board, just a chance for the students to keep their tuition low.

Regent DeConcini then moved, with Regent Hermes seconding the motion, that the Board increase base tuition for resident undergraduate and resident graduate students by 2.3 percent (which is the rate at which Arizona Median Family Income increased from FY 2005 to FY 2006. This increase is conditional on the Arizona State Legislature funding the Arizona University System at an amount 12 percent above the FY 2007 General Fund operating budget, which amounts to $115.7 million in additional funds for FY 2008, with none of the universities receiving any less than an 8 percent increase over the FY 2007 General Fund operating budget. The appropriation set forth above is inclusive of any state salary increases, providing such increases are similar to the increases provided in FY 2007. The appropriation set forth above does not and shall not include the $34.6 million in General Fund appropriations for research infrastructure projects in accordance with HB 2529 passed in the 2003 legislative session (2003 Session Laws, Chapter 267). In the event that the Arizona State Legislature does not approve a budget for the Arizona University System as set forth above, then the Regents would approve the university Presidents' recommendations for resident undergraduate and resident graduate tuition at a later date. Motion failed with a roll call vote as follows: In favor: Regent Calderón, Regent DeConcini, Regent Hermes and Superintendent Horne. Against: Regent Boice, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart and President Bulla.

Regent Boice then moved, with Regent DuVal seconding the motion, that the Board increase base tuition by 5 percent for resident undergraduate and graduate students at Arizona State University, Northern Arizona University and the University of Arizona. This motion is made with the understanding that the Arizona Board of Regents is seeking a commitment from the Executive and Legislative branches of Arizona government to support a request for an incremental contribution to the Arizona Financial Aid Trust (AFAT), over the $2.9 million already requested in the FY 2008 budget request, which would be an amount sufficient to offset the difference in the revenue stream to the universities generated by this proposed 5 percent increase from the university Presidents' base tuition increase recommendations. A 5 percent increase in base tuition for resident undergraduate and graduate students will increase resident undergraduate tuition at the University of Arizona in Tucson by $230, for a total tuition of $4,824 in 2007-2008; and by $205 at the University of Arizona South, for a total resident undergraduate tuition of $4,303 in 2007-2008; increase resident graduate tuition at both the University of Arizona in Tucson and the University of Arizona South by $264, for a total tuition of $5,544; at Arizona State University Tempe, increase resident undergraduate tuition by $230, for a total tuition of $4,821 in 2007-2008; and by $220 at the Polytechnic and West campuses, for a total resident undergraduate tuition of $4,620 in 2007-2008; increase resident graduate tuition at all Arizona State University campuses by $297, for a total tuition of $6,227; at Northern Arizona University in Flagstaff, increase resident undergraduate tuition by $219, for a total tuition of $4,594 in 2007-2008, and by $215 at the Statewide and Yuma campuses, for a total resident undergraduate tuition of $4,506 in 2007-2008; and increase resident graduate tuition at all Northern Arizona University campuses by $236 for a total tuition of $4,963.

Regent DeConcini stated that he felt this was a good compromise position, but he was still going to vote against it because he felt that the Board should have pushed to get the Legislature to fund the universities as they should.

Regent DuVal stated that he believed that this motion reflected the diagnosis that ASA has given us which is shifting more of the responsibility to the Legislature to do their job. He suggested that the Board communicate to the Legislature that you made this possible. This is a significant reduction in the President's request because we have confidence in the new relationship that exists between the Legislature and the Board in the way that the Legislature will respond.

Regent Hermes stated that he agreed there should be a better correlation between tuition and financial aid. He noted that Georgia is very similar to Arizona and if you compare tuition, it is about the same, but Georgia gets thousands of dollars more in state financial aid than Arizona.

Motion passed with a roll call vote as follows: In favor: Regent Boice, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes and President Bulla. Against: Regent Calderón, Regent DeConcini and Superintendent Horne.

Regent Calderón moved, with Regent DeConcini seconding the motion, that the Board increase nonresident undergraduate tuition for students at the University of Arizona Main and at the University of Arizona South by $1,258, for a total nonresident undergraduate tuition of $16,058 in 2007-2008; and increase nonresident graduate tuition for students at the University of Arizona Main and at the University of Arizona South by $1,281, for a total nonresident graduate tuition of $16,351 in 2007-2008; for Northern Arizona University, increase nonresident undergraduate tuition at the Flagstaff campus and for NAU Statewide Programs and Yuma by $932, for a total tuition of $14,248 in 2007-2008; increase nonresident graduate tuition at the Flagstaff campus and for NAU Statewide Programs and Yuma by $958, for a for a total nonresident graduate tuition of $14,645 in 2007-2008; and for Arizona State University, increase nonresident undergraduate tuition for students at all Arizona State University campuses by $1,103, for a total tuition of $16,853 in 2007-2008; and increase nonresident graduate tuition for students at all ASU campuses by $1,404 for a total tuition of $17,920 in 2007-2008. Motion passed with a roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes, Superintendent Horne and President Bulla. Against: none.

Regent Calderón stated that the Board is requested to approve the universities’ requests for differential tuition, special class fees, special program fees, and other fees for the 2007-2008 academic year. These additional charges to students are added to base tuition and mandatory fees.

Mark Denke, Provost Capaldi, and Provost Davis joined the meeting for this presentation.

Mark Denke stated that the Board has adopted criteria for evaluating requests of differential tuition. Differential tuition is tuition that deviates from the base tuition and applies to the entire college, school or campus. Differential tuition may be higher or lower than the base and may be established at the graduate or undergraduate level. Differential tuition may be requested using the following criteria: the quality of the student experience, access and affordability, cost of instruction, market pricing, benefits to the entire university and evidence of student consultation and support.

Provost Capaldi then presented ASU's request. ASU has two requests, one for the College of Law and the second for the Walter Cronkite School of Journalism and Mass Communication. The Board previously approved a range for the differential tuition for the Law School and this increase is still within that plan. The money will be used for improving quality. The differential tuition for the Walter Cronkite School is a brand new fee for upper division students and will be used to offset the digital media costs. This fee will not apply to any student who is currently on campus as they are being grandfathered in. It will only apply to entering juniors next year and will apply to new freshmen when they enter their junior year.

Provost Davis then presented the UA's request. UA is requesting differential tuition in the College of Law. This is consistent with the three phase increase over three years.

Regent Hermes moved to approve the recommendations with the exception of the differential tuition request for the Walter Cronkite School of Journalism and Mass Communication until such time as more outreach could be performed with the students. Regent Stuart seconded the motion.

President Crow stated that he believed the fee had been appropriately communicated to the students. There are 1900 undergraduate students in this school and representatives of these students had been consulted.

Regent Hermes withdrew the above motion and then moved to separate the differential tuition request for the Walter Cronkite School from the other requests and vote on it individually. Regent Stuart seconded the motion.

Regent Bulla stated that he felt this was a communication issue and it might be better dealt with by giving ASU a little more time to communication and consult with more students.

Upon motion by Regent Bulla, seconded by Regent Hermes, the Board approved tabling the vote on the Walter Cronkite School of Journalism and Mass Communication differential tuition request until the January meeting, with a roll call vote as follows: In favor: Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes, Superintendent Horne and President Bulla. Against: Regent Boice.

Upon motion by Regent Stuart, seconded by Regent Boice, the Board approved the requests of the University of Arizona and Arizona State University, excluding the Walter Cronkite School request, for differential tuition for 2007-2008, as presented in the Executive Summary, by roll call vote as follows: In favor: Regent Boice, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes and President Bulla. Against: Regent Calderón, Regent DeConcini and Superintendent Horne.

Regent Calderón stated that the Board was being requested to approve Special Class Fees for 2007-2008 for Arizona State University, Northern Arizona University and the University of Arizona.

Mark Denke, Provost Capaldi, Provost Davis and Provost Grobsmith joined the meeting for this presentation.

Mark Denke stated that the purpose of Special Class Fees is to cover expenses that are necessary for the successful completion of classes and their objectives. The expenses include off-campus field trips, special equipment, facilities used, private instruction, expendable materials, technology expenses, selected personnel expenses and deposits.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board approved the requests of Arizona State University, Northern Arizona University and the University of Arizona for special class fees for 2007-2008, as presented in the executive summary by roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Stuart, Regent Hermes, Superintendent Horne and President Bulla. Against: none.

Regent Calderón then stated that the next order of business was to consider the requests of the University of Arizona and Arizona State University for special program fees and for other fees for 2007-2008, as presented in the Executive Summary.

Mark Denke stated that Special Program Fees covered special costs not normally associated with the delivery of a program. The criteria for the fees is quality, access and affordability, cost, market pricing, benefits to the entire university, student consultation and support, increased earnings and potential of graduates and accountability.

Upon motion by Regent Calderón, seconded by Regent Boice, the Board approved the requests of the University of Arizona and Arizona State University for special program fees and for other fees for 2007-2008, as presented in the Executive Summary by roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes, Superintendent Horne and President Bulla. Against: none.

Regent Stuart stated that the Board was being requested to review the annual report on the academic performance of Arizona’s 2004-2005 high school graduates enrolled in the universities in 2005-2006 (High School Report Card).

Regent Horne stated that after looking at the reports, the numbers of students seemed smaller than he expected and he would like to have the numbers confirmed.

Dan Anderson gave a brief overview of the High School Report Card. The High School Report Card was originally developed as a tool for the universities and colleges to prepare to be fed back to the High Schools so the High Schools could see how their students performed. The Report Card does an excellent job of informing individual High Schools about the performance of their students in their first year, but provides overall policy information that others can use. The preparation of students is very important in their success in the universities. Overall, for all Arizona graduates, between 2005 and 2006, the retention rate overall was 78.9%, but for those who were admitting without any academic deficiencies, their retention rate was 83.2%. The students who were admitted with either one or two academic deficiencies retention rate was 69%. In the area of graduation for all Arizona High School graduates, the college graduation rate was 53.9%. Students without deficiencies had a college graduation rate of 57.5%, and those with academic deficiencies 41%. The biggest problem that students seem to have is in Math.

Regent Stuart stated that he would like to have a fourth category added to this report which looks at admissions.

Superintendent Horne stated that he believed high school students need to take a more rigorous program and they need to get credit for taking it. He would like to see the number of students admitted with deficiencies reduced to zero.

Joel Sideman stated that the graduation and retention information is not in the report card itself, but it could be put in the report if the Board thinks it should. Regent Stuart said that information should be in the report.

The meeting recessed at 3:55 p.m., and reconvened at 9:17 a.m. on Friday, December 1, 2006.

Regent Calderón stated that the Board was being asked to approve a tuition surcharge for undergraduate students who exceed the statutory credit hour threshold. Over the last two years the legislature established a new law called the credit hour threshold. The law has two parts. It cuts off state funding support for students who exceed a specific number of credit hours and it requires the students to pay charges in addition to tuition and fees. State law mandates that the Board of Regents establish this additional amount and requires students to pay it. The Board and the universities were able to get a number of exemptions enacted.

Michael Hunter introduced Representative Jennifer Burns, who was instrumental in sponsoring the legislation that created the exemptions and he stated that she deserves a great deal of credit for that. The proposal would affect 281 students; these are students who would exceed the 150 credit hour threshold as described in state statute. The proposal states the surcharge would be 20% of the resident undergraduate tuition (rounded to the nearest dollar) and would apply to both resident and non-resident undergraduate students. The surcharge will be based on a per credit hour charge for 1-6 credit hours and for students taking 7 or more hours the surcharge would be 20% of the full tuition amount.

Regent Hermes stated that there was some confusion in the student newspapers. This is not something that the board is doing; this was initiated by the state legislature.

Upon motion by Regent Calderón, seconded by Regent Boice, the Board approves the requests of the University of Arizona, Northern Arizona University and Arizona State University for the tuition surcharge, which will equal 20% of the resident undergraduate tuition (rounded to the nearest dollar) for the 2007-2008 academic year, as required by statute and as described in the executive summary by roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart , Regent Hermes, President Bulla. Against: none.

Regent Calderón stated that pursuant to HB 2863, the Board was requested to approve ASU’s 4 year Guaranteed Rate Tuition Pilot Program as a voluntary program for incoming undergraduate students beginning Fall 2007.

President Crow stated that ASU was asked by legislators to come up with a 4 year price to attend the university. This is a pilot project beginning with the Fall of 2007 and the Board will have to decide if they continue the program in the Fall of 2008.

Upon motion by Regent Calderón, seconded by Regent Boice, the Board approved Arizona State University’s request for a Guaranteed Rate Tuition Pilot Program beginning in academic year 2007-2008, as presented in the Executive Summary by roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes and President Bulla. Against: none.

Regent Calderón stated that the order of business would be to set tuition at The University of Arizona College of Medicine for FY 2007-2008. He further stated that the College of Medicine has maintained the practice of setting tuition no higher than the top of the lower one-third of rates set by all other state-supported colleges of medicine. This year, however, the College is requesting a different approach.

President Shelton presented this item. He stated that this proposal was developed by the College of Medicine administration together with the College of Medicine students. The students have stated that they feel very positive about this proposal. He stated that it gives the students predictability and that is what they wanted.

Dr. Phillip Malan, Vice Dean for Academic Affairs at the College of Medicine, stated that the goal was to be able to present to entering students what their tuition would be for all four years of medical school. The current proposal, generated by the students, set the entering tuition at the 33^rd percentile of public medical schools and to project the subsequent years using the higher education price index.

Regent DeConcini asked if the College of Medicine would provide him with information regarding non-resident students attending the College of Medicine. He would like to have a study done as to how much money the College of Medicine would receive if 25% and/or 50% of the student body were non-residents. Dr. Malan stated that they would run a number of scenarios and see what the implications will be both financially and for producing more physicians for Arizona.

Dr. Malan stated that the original mission of the College of Medicine was largely to provide Arizonan’s with an opportunity to train in medical education. There are reasons not to do that anymore because the mission has broadened a little bit to not only train Arizonans, but to attract physicians to Arizona and one way of doing that is to train more physicians here. As the Phoenix campus expands there might not be a big enough applicant pool to come up with 260 qualified resident students.

Regent DeConcini asked how many graduate doctors from our medical school stay in Arizona. Dr. Malan responded that it is approximately 60-70%. One of the reasons for this is that there needs to be more residency programs. Regent DeConcini then asked how many out-of-state students come here to do their residency. Dr. Malan stated that in his residency program it is about 70%-80% of the residents are from out of state. Dr. Malan also stated that most medical schools do have a cap on the number of out of state students they will take and it is usually in the 10-15% range.

Upon motion by Regent Calderón, seconded by Regent Boice, the Board approved the FY 2007-2008 tuition at the University of Arizona College of Medicine at the following levels, excluding mandatory fees: $16,456 for the graduating class of 2008; $16,643 for the graduating class of 2009; $16,867 for the graduating class of 2010; and $17,512 for the graduating class of 2011, as presented in the Executive Summary by roll call vote as follows: In favor: Regent Boice, Regent Calderón, Regent DeConcini, Regent DuVal, Regent Mariucci, Regent Palacios, Regent Stuart, Regent Hermes and President Bulla. Against: none.

Regent Calderón then stated that he had asked that this item be pulled off the Consent Agenda. He stated that this was a request from Arizona State University for Board approval to accept a new award from the Corporation for Public Broadcasting. The proposed amount of the award is $1,558,848.

Regent Calderón asked President Crow to describe the types of community programming that will be expanded especially to the unserved and underserved audiences.

President Crow stated that public television is often the most watched public television station in the United States. KAET is used as a platform to deliver public broadcast corporation content through the arrangements with them and also as a platform to deliver locally important content. KAET now has two public shows - Horizon and Horizante. There is a third show focused on Native American issues. The resources are used to help us in the delivery of those and other new programs. Asset is a KAET program that delivers television based content to every public school in Arizona. These resources will assist with expanding the ASSET programs and ascertain that every community, no matter how distant or financially challenged they might be, will be able to receive this programming.

Regent DeConcini asked if there was any federal funding for this station. President Crow answered that they get no federal funding.

Regent Calderón would like to get an annual report from KAET and KUAT about their operations, funding sources, that sort of thing.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board unanimously approved the award from the Corporation for Public Broadcasting for support of KAET Public Television Station, as presented in the executive summary, and that Arizona State University and the University of Arizona are requested to submit annual reports on their public television stations beginning June 30, 2007.

Regent Calderón stated that he had asked that this item be removed from the Consent Agenda. He stated that the Board was being asked to approve the Sixth Amendment to the Board’s Optional Retirement Plan to revise the definition of “Normal Retirement.:

Nancy Tribbensee explained that the revision was being requested to conform to the definition of “Normal Retirement” for the Department of Administration. It only applies to deceased employees so that their beneficiaries can collect their Retiree Accumulated Sick Leave benefits.

Regent Mariucci declared a conflict and abstained from voting. Upon motion by Regent Calderón, seconded by Regent DuVal, the Board unanimously approved the amendment to the Arizona Board of Regents Option Retirement Plan, and authorized the Executive Direction to execute the amendment, as presented in this Executive Summary.

Academic Program and Organizational Unit Change Requests and Summary Report on Program and Organizational Changes Approved by the Executive Director (Agenda Item #14)

BA with a major in Global Health (School of Human Evolution and Social Change)
PhD in Social Science & Health (School of Human Evolution and Social Change)

MA in Criminology and Criminal Justice (Human Services)
PhD in Criminology and Criminal Justice (Human Services)
MS in Evaluation Research (Human Services)
BS in Youth Development Leadership (Human Services)

Master of Applied Leadership and Management (MALM) (School of Global Management and Leadership
Master of Accountancy and Applied Leadership (MAAL) (School of Global Management and Leadership

Regent Stuart stated after discussing this matter with several individuals, the Board is going to create an Academic Affairs Committee and everything that is currently assigned to Programs will go to the Academic Affairs Committee. The Committee will meet about twice a year, half day meetings and will take up in much more detail and with much more consideration and Board input these items. Academic Program changes have been handled by Provosts presenting a brief overview of the information that is presented in the Board book. Regent Stuart stated that he felt that was not adequate. The format does not allow the funding and revenue sources to be properly explained. The new Committee format will allow the Provosts to make more in-depth presentations.

Arizona State University is requesting planning approval for eight new programs and implementation approval for two. The University of Arizona is seeking approval to plan a Master of Fine Arts in Dance.

Upon motion by Regent Stuart, seconded by Regent Boice, the Board unanimously approved the academic program requests as listed in the executive summary.

Regent Stuart stated that the Board was being requested to review and approve the university system’s Fall 2006 Enrollment Report.

Regent Stuart stated that there was more enrollment growth in this decade than in all of the 1990’s. Non-resident undergraduate enrollment is up 24.5% in the system and highest at the UA at 29.9%. For the first time, this report includes enrollment figures for ASU at the Downtown Phoenix Campus and at the NAU Yuma Campus.

Dan Anderson stated that the actual enrollments, at this time, are above the projections that were used in the 2004 Redesign effort. Right now the actual enrollments within the university system are about 2700 students above what had been forecast for this point in time. Projected out to the future, that would mean that the university system would potentially be looking at approximately 144,000 students by 2010 and 185,000 students in 2020. The previous forecast at 2020 was for 182,000 students.

Regent Stuart stated that the Board was being asked to review a policy revision that would amend the requirements for resident status to conform to the recent amendment to A.R.S. §15-1802 for spouses and dependent children of members of the armed forces who are transferred pursuant to military orders.

Regent Stuart stated that since Prop 300 had passed the ABOR policy will need to be redrafted so the item is being pulled from agenda at this time, with the expectation that a revised amendment will be submitted at the January meeting.

Regent Stuart stated that this item was pulled off the Consent Agenda and the Board is requested to authorize submission of the 2006 Progress Report on Articulation and Transfer for Arizona Postsecondary Education to the Joint Legislative Budget Committee from the Arizona Board of Regents and the Arizona community college districts.

Stephanie Jacobson stated that this report is made annually to the legislature specifically to report on the progress implementing a statewide plan that was mandated by the Legislature. Focus of this report is on the legislative model. One of the key components of the transfer system is the course applicability system which provides a service to students, particularly those at the community colleges trying to determine how the courses they are taking will transfer to the university system or how the courses they have completed will fill certain program requirements. Approximately 4500 individuals have established accounts and are utilizing this system.

Stephanie then stated that the second area that is reported is the progress made on the six recommendations from the Joint Conference Committee. This report shows the collaborative nature of the universities and the community colleges.

Regent Bulla stated that he had heard that electronic courses within the community colleges were not transferring to the universities. He stated that matter needed to be reviewed.

Upon motion by Regent Stuart, seconded by Regent Calderón, the Board unanimously authorized the 2006 Progress Report on Articulation for Transfer for submission to the Joint Legislative Budget Committee.

Five-Year Strategic Plans (Agenda Item #20)

Regent Bulla stated that the Board is being requested to review and approve the proposed Five-Year Strategic Plans for FY 2008-2012 for the universities and the Board of Regents.

Regent Bulla stated that these were works in progress and there would be some additional information put into the plan before it is submitted, but they must be submitted by January 1. He stated that the total incremental dollars needed was 255 million for the FY 08. He further stated that a number of useful refinements have been incorporated into the plans this year such as each university added five additional past years to the Strategic Plan’s performance measures to indicate past performance as compared to the projected performance and short executive summaries were added to comply with a new statutory requirement.. He went on to say that the plans are being expanded to include greater focus on the University System’s ability to address future university level enrollment growth throughout the state, the wide-ranging distance education delivery systems, plans for major partnerships with the community colleges, plans for the UA Medical School in Phoenix, and the universities’ very significant economic impact on Arizona.

Regent Bulla then told that the Board that the strategic plans are due to the Executive and Legislative branches of the government on January 1. After this Board’s vote today there may be some requested modifications. If there are substantive modifications, the plans will be brought back to the Board for subsequent approval.

Regent Mariucci believes that the Regents agree that the strategic plans need to be more businesslike and more succinct and therefore have higher impact on the readers. She asked what the implications of taking more time to get the plans in would be.

Joel Sideman stated that it is a statutory deadline and the Board does not like to be in a position where we head into the legislative session without having submitted the required documents. Having said that, we have never been grilled over the details of the Strategic Plan and it is not clear how they fit into the legislative deliberations. The message that is being given is that we need to do a better job and if we can do a better job of explaining our plans that we are likely to get more attention at the legislature. With respect to this cycle the Board has to weigh the risk of raising an issue that otherwise wouldn’t be on the table if we don’t get the paperwork in.

Regent Bulla stated that President Shelton had given his presentation yesterday in the study session. There will be a more extensive presentation as the Board visits each of the campuses during the spring.

Regent Boice stated that he agrees that there need to be some changes made, but the Board needs to go ahead and submit the plans in conformance with the statute and then work to improve them for the future.

President Crow stated that the Five Year Strategic plan is a conceptualization of where we are going and a situation report of where we are. The format of the report is only partially guided by the universities; there are specific questions and elements mandated by the legislature.

Upon motion by Regent Bulla, seconded by Regent Boice, the Board adopted the 2006-2007 Five-Year Strategic Plans (2008-2012) for the universities and Board of Regents, with Regent Mariucci voting against the motion.

Regent Calderón reported that the JCC held its last meeting on October 18. The focus of the meeting was on the implementation of the six recommendations developed by the JCC and endorsed by the Board and the Community Colleges. The first four recommendations were also endorsed by the Governor’s P-20 Council. The JCC is asking for periodic reports regarding the implementation of the recommendations. The Universities provided a very impressive report on the work they had done to date increasing transfer credits, increasing the number and scope of community college and university partnerships, establishing of joint funding models, and expansion of the university system campuses and statewide programs.

Another item on the agenda was the implementation of recommendation 5 which was to establish a pathway for baccalaureate degrees, for which there is an established need, to be offered at a community college. JCC is starting to set up the framework to make the academic and economic assessment as to how to whether the request would make sense or not. There were two key steps stated that would be required for a new program, one was an outline for the study to determine the need and an outline for an academic program proposal which describes the details that would be addressed in proposing an academic program once the need is established. The next JCC meeting is December 13, and the discussion will be continued at that time.

Regent Calderón stated that the P-20 Council has noted that they want to become involved in commissioning a study or commissioning the process as to how to establish the needs, etc.

President Haeger stated that the December JCC meeting will be very important. The university presidents and the community college presidents are very close. The JCC has moved in the direction of local and regional assessments as to whether there is a need for a new program under recommendations 5 and 6. The Governor’s office is looking at a statewide assessment and the challenge will be to bring those two view points together.

President Shelton stated that he was most impressed with the Presidential Summary and how everyone got down to specifics. They talked about what they needed to do to work their way through any concerns or issues on recommendations 5 and 6.

President Crow stated that in the spirit of cooperation Arizona State University agreed, in the next month or two, to build a simulation exercise to visualize a range of scenarios, institutional make-ups, institutional designs, new institutions, expanded institutions, population dynamics, demand dynamics, and educational achievements.

Regent Calderón finally stated that there may be existing Board of Regent’s policies that are antiquated. One of the policies precludes the universities from offering lower division undergraduate courses in areas where community colleges already offer the course. The question came up do the universities do enough to extend lower division courses to rural students, many of whom are in minority concentrated areas. The Board policy keeps the universities from moving in that direction. Regent Calderón stated that he believed that the Board needs to look at this policy and see if something needs to be changed. We need to make certain that out-of-state colleges that are coming into the state do not have an advantage over the state universities.

Regent Palacios chaired this portion of the meeting.

Regent Palacios stated that the IT/AZUN Committee met on November 20^th. The Chief Information Technology Officers discussed their plans for using the student technology fees that the universities have requested. The scope of work document was reviewed for the ABOR RFP to retain a consultant to advise the Board in identifying future collaborative IT projects. The study will focus on business computing at the three universities.

Regent Palacios stated that the Committee approved nine Arizona Regents Reach Out Grants totaling $489,860 to support innovative distance learning projects with an emphasis on collaboration and workforce development. In addition, two awards from AZUN funding sources were made: one for a Tribal Financial Management Certificate and course curriculum development program to ASU and UA, and the second award for Methamphetamine and Other-Illicit-Drug Education online program for medical students and health professionals to the UA Medical School in Tucson and Phoenix. The total amount awarded is $199,876. An additional $24,100 from the ABOR IT Innovation fund was approved to help fund a consultant to develop a Tri-University Identity Federation plan. When the plan is implemented it will allow cross-university web single sign-on capability.

Regent Palacios also reported that the Committee heard a presentation by Richard Hezel, President of Hezel Associates consulting firm, on their evaluation of the AZUN phase-1 web portal. The portal should be ready to roll out in early December. A number of recommendations were presented centering on the desirability of developing a charter, business plan and technical plan for Phase-2 of the portal. These are being developed. The consultant also recommended continuing with the Phase-1 vendor “Decision Academics”. The Committee approved a revenue sharing agreement for AZUN that the three universities have developed.

President Palacios stated that Northern Arizona University was requesting approval of its Network Upgrade and Wireless Expansion Project.

President Haeger stated that they would be going ahead with the project even if they don't get the increase in technology fees which were requested in an early item that was tabled until the next meeting. NAU currently has an IT fee and a portion of that fee will be designated to cover these costs. He further stated that they might have to look for a small portion of the funding from other university resources, but they would go ahead with the project. Regent Palacios stated that she felt it was important that it is understood that this is not passed with a presumption of approval of the IT fee.

Upon motion by Regent Palacios, seconded by Regent Calderón, the Board approves the Northern Arizona University request to upgrade and expand its wireless network at an estimated cost of $4.64 million dollars.

Regent Boice chaired this portion of the meeting.

Regent Boice stated that the Board was required to make recommendations as to whether Board policy should be changed on a number of enrollment policy issues, such as whether students should be physically present in the state to qualify for state funding, or whether faculty should be responsible for maintaining class rosters, etc. The matter was discussed at the August Board meeting and it was decided that no policy changes were necessary at that time. The Joint Legislative Budget Committee reviewed our response at its November 15 meeting and gave it a favorable review. The Board was provided a report on results of the November 7 General Election and the organization of the 48th Arizona Legislature and a legislative update.

Michael Hunter then provided a summary of the election outcome. Michael Hunter then stated that Tom O’Halleran was appointed as the Chair of the Senate Higher Education Committee. Senator Bob Burns will remain Chair of the Appropriations Committee. The House will be announcing chairmanships today.

Regent Hermes updated the Board on the activities of the ABOR Task Force on Textbook Costs. The Task Force has had two meetings since September and the next meeting will be in early January. The Task Force is doing most of their work on the Internet using Sharepoint. Regent Hermes suggested that this Task Force should be moved under the new Academic Affairs Committee.

Regent Boice chaired this portion of the meeting.

Kathy Bedard, Joel Valdez, Kathe Shinham, Carol Campbell and Rich Stanley joined the meeting for these presentations.

Regent Boice reported that the Capital Committee met on November 9 to consider all Capital Committee items appearing on today’s agenda. At that meeting, the Committee approved the University of Arizona’s request for Project Approval for the Veterinary Science and Microbiology Heating, Ventilation, and Air Conditioning Improvements Phase 1. All Capital items on the Board agenda have been reviewed by the Capital Committee.

Regent Boice stated that the University of Arizona was requesting combined Project Implementation Approval and Project Approval for the Law Commons project to renovate and expand the existing law building to create the Law Commons.

The approved total project budget is $21M, which will be funded by $14M in gifts to be received prior to groundbreaking, and $7M in System Revenue Bonds, with debt service funded by tuition. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Upon motion by Regent Calderón, seconded by Regent Bulla the Board unanimously approved the University of Arizona’s request for Combined Implementation Approval and Project Approval for the Law Commons project, as recommended by the Capital Committee, and as presented in the Executive Summary: Moved – Bulla seconded, unanimous.

Regent Boice stated that the University of Arizona was requesting combined Project Implementation Approval and Project Approval for the Intercollegiate Athletics (ICA) Facilities Additions and Renovations project. This $20M project, which includes a $2.8 million budget increase, will be funded by $1M of current gifts and the sale of $19M of System Revenue Bonds, with annual debt service funded with gift revenues. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval. This project received a favorable review by JCCR at its November 15 meeting.

Upon motion by Regent Boice, seconded by Regent DeConcini, the Board unanimously approved the University of Arizona’s request for Combined Project Implementation Approval and Project Approval with a Budget increase, for the Intercollegiate Athletics Facilities project, as recommended by the Capital Committee, and as presented in the Executive Summary.

Regent Boice stated that the University of Arizona was requesting Project Implementation Approval to renovate and expand the Cherry Avenue Garage to provide approximately 250 additional parking spaces at a total estimated project cost of $6.6M which includes a $1.6 million budget increase. The project will be funded by $5.5M in auxiliary funds and $1.1M in Parking Replacement funds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Regent Boice explained that there had been some questions regarding this project and the fact that parking spaces were costing approximately $26,000 each opposed to an average of $12-14,000 each. He wanted the Regents to know that after investigating this matter it turns out that what was really happening was retrofitting to provide handicap access to that parking lot. The cost was run up because of the necessity for the handicap improvements including elevators.

Upon motion by Regent Boice, seconded by Regent Palacios, the Board unanimously approved the University of Arizona’s request for Project Implementation Approval, with a budget increase, for the Cherry Avenue Garage Expansion Project, as recommended by the Capital Committee, and as presented in the Executive Summary.

Regent Boice stated that Northern Arizona University was seeking a second Revised Project Approval with a Budget Increase of $2.4M for its Applied Research and Development building. The revised total estimated project cost is $25.6M. The project will be funded by sale of $21.3M in COPs, with debt service funded by State Research appropriations beginning on July 1, 2007; and $4.275 million in TRIF funds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Upon motion by Regent Calderón, seconded by Regent Boice, the Board unanimously approved Northern Arizona University’s request for Revised Project Approval, with a budget increase, for the Applied Research and Development Building, as recommended by the Capital Committee, and as presented in the executive summary.

Regent Boice stated that he and the Committee are hoping that the universities will do a better job of the original projections on project approvals and not be bringing so many budget increases to the Committee.

Regent Boice stated that Northern Arizona University was requesting a second Revised Project Approval with a Budget Increase of $1.3M to construct the New Laboratory Facility. The revised total estimated project cost is $37.3M. The project will be funded by the sale of $36M of COPs, with debt service funded by State Research appropriations beginning on July 1, 2007, and by $1.3M in TRIF and other university funds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board unanimously approved Northern Arizona University’s request for Revised Project Approval, with a Budget Increase, for the new Laboratory Facility, as recommended by the Capital Committee, and as presented in the executive summary.

Regent Boice stated that Arizona State University was requesting authority to negotiate and enter into a Lease or Sublease Agreement with Capstone Developments for the development of student housing for the ASU Downtown Phoenix campus. The financing structure proposed by Capstone would bond the entire cost of Phases I and II, including the land. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Rich Stanley stated that student housing is a critical element for Arizona State University.

At the opening of the Phoenix campus we have 260 beds in the temporary housing available for this academic year and next academic year. Permanent housing is required in Fall 2008. In order to preserve debt capacity for the university, ASU is moving is the direction of working with third-party developers to build needed housing on all of its campuses. ASU selected Capstone Development to build housing on the downtown campus. This project will deliver 700-750 beds of freshman oriented housing in Fall 2008 and 500 – 550 beds of upper class oriented housing in Fall 2009. The lot where the project will be built is partly owned by Capstone and partly owned by the City of Phoenix. The land will be transferred to the university at no cost and then leased back to a third party, not-for-profit, for up to sixty years to allow the project to be constructed.

Regent Boice said the issue is a matter of the financing done by Capstone and will be “off” ASU’s book meaning that it will be handled differently by the bond raters than it would be if ASU was borrowing the money outright.

Regent Mariucci stated that this method protects the debt capacity of the university for investments in academic space and learning space. Since there is ample private capital in the market today for housing deals, it seems appropriate to use innovative public-private partnerships in order to optimize ASU’s housing needs without encumbering any further ASU’s debt capacity as defined by the rating agencies or the state statutory limit. This is an area of corporate finance that is evolving as we speak. It is incumbent on the Board and the universities to be leading edge in helping to education and inform as well as lead the charge in how these deals are structure so the debt that is incurred by the developer does not directly, indirectly or contingently make ASU or the Board liable so it does not encumber the debt capacity. This is a very innovative project. This is an arms length transaction with a private developer who is assuming the marketing and operational risk of this building. If they don’t succeed, the Board and the university have no intention or obligation to take it over and bail them out.

Regent DeConcini asked if what he understands is correct, the Board and the university are not obligated in any financial way as to bonding capacity. Regent Mariucci responded by saying that legally we are not taking on any legal obligation for this debt. The trends are very encouraging that this will not be held against the university in the bond rating process.

Regent DuVal asked if it was correct that what we are approving today are two different things: Phase I and Phase II, so that the financing pieces can go forward and we are also approving a master development agreement with Capstone for future Phases up to the possibility of 3000-4000 beds subject to the successful and satisfactory delivery of each prior phase. Rich Stanley stated that was correct.

Upon motion by Regent Boice, seconded by Regent Mariucci, the Board unanimously approves Arizona State University’s request for authorization to enter into a Lease or Sublease with Capstone Development, for the development of student housing on the Downtown Phoenix campus, subject to approval to the ABOR Capital Committee and Board, and subject to review by Board counsel and ASU counsel of the final documents, as recommended by the Capital Committee, and as presented in the executive summary.

Regent Boice stated that Arizona State University was requesting authority to sell or lease approximately 9.5 acres of ASU Rio Salado property in Tempe. ASU also requests the waiver of ABOR Policies 7-204A, 7-204A.4, 7-206D and 7-206E. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Carol Campbell explained why the university was going to an RFP process. The university has attempted to sell this property by auction and the auction failed. Prior to selection of the party that may buy, lease or develop this property, this item will come back to the Capital Committee and any agreement will come back to the Capital Committee for approval as well.

Upon motion by Regent Boice, seconded by Regent DuVal, the Board approved Arizona State University’s request for authority to sell or lease approximately 9.5 acres of Rio Salado property east of Rural Road and the request for policy waiver, as recommended by the Capital Committee, and as presented in the executive summary.

Regent Boice stated that Arizona State University was requesting Project Approval to construct a 240,000gsf Polytechnic Academic Complex to provide space for enrollment growth and program expansion of the Morrison School of Management and Agribusiness; the College of Science and Technology; the School of Educational Innovation and Teacher Preparation; and East College, at a total estimated project cost of $103M. The project will be funded by the sale of COPs, with debt service funded by General Fund appropriations. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Upon motion by Regent Boice, and seconded by Regent DeConcini, the Board unanimously approved Arizona State University’s request for Project Approval for the Polytechnic Academic Complex project, as recommended by the Capital Committee, and as presented in the executive summary.

Regent Boice stated that Arizona State University was requesting Project Approval to construct a 38,000gsf building for the ASU Police Department at a total estimated project cost of $12.5M. The project will be funded by the sale of System Revenue Bonds, with debt service funded by tuition. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

ASU also requests Project Approval for site preparation for Barrett College and South Campus Academic Village at a total estimated project cost of $6M. The project will be funded by the sale of System Revenue Bonds, with debt service funded by revenues generated from Barrett College and South Campus Housing. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Carol Campbell discussed the status of the Visitor’s Information Center dome issue. In compliance with state law, ASU has consulted with the State Historic Preservation Officer (SHPO) regarding possible options to preserve the Visitor’s Center. Although ASU has demonstrated that the options result in an unacceptable adverse impact on the project, SHPO has responded that alternative plans “are not consistent with the preservation of historic properties, the duties of the agency, and the professional standards which the state historic preservation officer recommends.” ASU and SHPO are at an impasse. ASU believes they have fulfilled the requirement to consult with the SHPO and to consider alternatives. ASU has performed the required documentation of the building and submitted the documentation to SHPO. ASU will preserve the dome and reuse it.

Regent DeConcini asked that the minutes reflect that the Regents had consulted with legal counsel and believe that ASU has fulfilled its legal obligations with regard to review by the State Historic Preservation Office.

Upon motion by Regent Boice, seconded by Regent Calderón, the Board approved Arizona State University’s request for Project Approval for construction of the Department of Public Safety Facility, and Project Approval for site preparation for the Barrett College and South Campus Academic Village project, as recommended by the Capital Committee, and as presented in the executive summary, with Regent Hermes voting against the motion.

Regent Boice stated Arizona State University is requesting authority to sell, contingent upon favorable review by the Joint Committee on Capital Review (JCCR), fixed interest rate System Revenue Bonds in an amount not to exceed $80M for the purpose of financing 9 capital projects. Debt service will be funded by tuition, Residential Life revenues, Indirect Cost Recovery, lease revenues, and other local funds. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

Upon motion by Regent Boice, seconded by Regent DuVal, the Board unanimously approved Arizona State University’s request for authority to sell System Revenue Bonds, as recommended by the Capital Committee, and as presented in the executive summary.

Regent Boice stated that Regent Calderón had asked that this item be removed from the consent agenda and that the University of Arizona was requesting Revised Project Approval with a Budget Increase to renovate Old Main to house the Office of Admissions and Orientation Services, currently located in the Nugent Building. The project budget has been increased by $1.3M from the $3.3M original budget, for a total revised estimated project cost of $4.6M. The Capital Committee reviewed this item at its November 9, 2006, meeting and recommends Board approval.

President Shelton discussed the relocation of the three student groups caused by this project. The Native American Student Affairs relocated to Nugent Building and all the reports is that they are extremely pleased with the new expanded space. The Asian-Pacific Student Center also was relocated to the Nugent Building just recently. There are still some adjustments being made to their new space. The third group was the Undergraduate Initiatives and they are very pleased with their new space, but there are still some adjustments being made.

Upon motion by Regent Boice seconded by Regent Calderón, the Board unanimously approved the University of Arizona’s request for Revised Project Approval with a Budget increase of $1.31 Million for the Old Main Renovations project.

Regent Calderón reported on his recent meetings with the Student Health Center directors and their immediate supervisors to learn more about their operations and the student health insurance program. Regent Calderón stated that the three public universities have an agreement to collaborate on bidding out the student health insurance product at least every five years.

Northern Arizona University is in the planning stages for facility and program development to bring their counseling and testing, disability support services and the Fronske Health Center into one location in a new allied health building.

Regent Calderón stated that his one concern is that ASU needs to immediately address its student health care center space shortage as part of its Capital Improvement Plan. The Student Health Center at ASU was last renovated in 1968. ASU has the most limited resources and is dealing with the highest number of students.

President Crow stated that ASU is going to look at the student health center needs and, if appropriate will make the necessary requests through the Capital Committee. He added that health care services at ASU are greater than the facilities. Arizona State University will have a task force to look at options.

Regent Stuart stated that Dean Keith Joiner and Vice President Dean David Young were joining the meeting for this presentation.

Dean Joiner stated that the program had completed a positive accreditation site visit in early November with the Liaison Committee for Medical Education (LCME). The visit went very well. The site team reported in its exit interview with Dean Joiner that the College of Medicine Program was well prepared to accept twenty-four students in the summer of 2007 and they will report back to the full LCME who will vote on this matter. The primary comment was that in order to expand the class beyond the initial twenty-four more resources will be needed.

Dr. Marcus Ford reported that the Arizona Faculties Council met and talked about textbooks, tuition and the Academic Bill of Rights. The Academic Bill of Rights proposal has been put forward in twenty states. It is likely that this proposal will come forward in the Arizona legislature as well. The proposal has yet to pass in any state.

Regent DeConcini asked if the legislature was going to hold hearings or if Dr. Ford had any information on this matter. Dr. Ford answered that he had no further information at this time.

MINUTES

President Shelton distributed information about the University of Arizona's adaptive Athletics’ program.

Items on the Consent Agenda that are marked in these minutes with an asterisk (*) were considered as consent matters and were unanimously adopted upon the motion of Regent Stuart, seconded by Regent Hermes.

The August 10-11, 2006, Executive Session minutes and the September 27-28, 2006 Regular Meeting minutes were approved.

*Authorization to Approve a Continuation Award from the Jet Propulsion Laboratory (JPL) #957624 (ASU) (Agenda Item #6)

*Report on High School Students Taking University Courses in 2005-2006 (Agenda Item #19)

*UA Bookstore Information System Project (Agenda Item #23a)

*Revised Project Approval with Budget Increase: Arizona Biomedical Collaborative 1 (ABC 1) Building (ASU) (Agenda Item #36)

Regent Calderón chaired this portion of the meeting.

Academic Program and Organizational Unit Change Requests and Summary Report on Program and Organizational Changes Approved by the Executive Director (Agenda Item #14)

Five-Year Strategic Plans (Agenda Item #20)

Regent Palacios chaired this portion of the meeting.

Regent Boice chaired this portion of the meeting.

Regent Boice chaired this portion of the meeting.

Regent Stuart stated that Dean Keith Joiner and Vice President Dean David Young were joining the meeting for this presentation.

President Bulla thanked the University of Arizona and everyone there that helped with the Board meeting arrangements for making this a very good meeting.

The meeting adjourned at 11:58 a.m.