A meeting of the Arizona Board of Regents was held December 6 and 7, 2007, in Old Main, Arizona State University, Tempe, Arizona.

President Boice called the meeting to order at 1:13 p.m., on Thursday, December 6, 2007.

Also present were President Michael Crow, Ms. Carol Campbell, Mr. Rich Stanley, Lori Briese, and Mr. Paul Ward, Arizona State University; President John Haeger, Dr. Elizabeth Grobsmith, Mr. Dave Harris, Dr. M. J. McMahon, Ms. Pat Haeuser, and Ms. Kathe Shinham, Northern Arizona University; President Robert Shelton, Ms. Edith Auslander, Ms. Judith Leonard, Ms. Carla Nunn, Mr. Greg Fahey, Dr. Gene Sander, and Mr. Joel Valdez, University of Arizona; Executive Director Joel Sideman, Secretary to the Board Peggy Martin, Board Counsel Nancy Tribbensee, Dr. Art Ashton, Ms. Kathy Bedard, Ms. Gale Tebeau, Ms. Christine Thompson, Ms. Anne Barton, Ms. Stella Galaviz, Dr. Mark Denke, Dr. Sandra Woodley, Ms. Cathy McGonigle, Ms. Stephanie Jacobson, and Mr. Dan Anderson, Central Office, and Dr. George Watson, Arizona Faculties Council.

All lists, reports, summaries, background materials and other documents referred to in these minutes can be found in the December 6-7, 2007, Documents Files.

Regent Calderón led the Pledge of Allegiance.

CONSENT AGENDA

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 Palacios, seconded by Regent Calderón.

*Minutes

The September 27-28, 2007 Regular Meeting Minutes and the August 23-24, 2007 Executive Session Meeting Minutes were approved.

RESOURCES CONSENT AGENDA

*FY 2007 University Technology Transfer Reports (Board Item #10 - A - B - C)

The Board reviewed the universities’ Technology Transfer Reports highlighting activities and performance for the fiscal year ending June 30, 2007.

*Authorization to Approve Awards (ASU) (Board Item #11)

The Board approved Arizona State University’s request for authorization to approve seventeen new and continuation awards as described in the executive summary.

*Authorization to Approve Contracts (UA) (Board Item #12)

The Board approved the University of Arizona’s request for authorization to approve three new contracts as described in the executive summary.

*Disclosures of Substantial Interest of University Employees (UA) (Board Item #13)

The Board approved the University of Arizona’s request for approval for several university employees to establish and maintain substantial interests as described in the executive summary.

*Appointments and Reappointment of Arizona Area Health Education Centers (Arizona AHEC) Program Advisory Commission Members (Board Item #14)

The Board approved the appointments of R. Cruz Begay and Ross Kosinski, and the reappointment of Sandra Ludwig to the Arizona Area Health Education Centers Program (Arizona AHEC) advisory commission.

*Approval of Arizona Area Health Education Centers (Arizona AHEC) Revised FY 2008 Program Budget (Board Item #15)

The Board approved the revised FY 2008 Budget for Arizona AHEC. This revision was necessary due to the receipt of FY 2007 State Lottery Funds after the Board’s approval of the preliminary budget in June.

*Proposed Amendment to ABOR Policy 4-311 “Arizona Student Financial Aid Trust Fund” to Conform to Change in Arizona Law (Second Reading) (Board Item #16)

The Board approved the proposed amendment to Board Policy 4-311 to reflect statutory changes in the requirements of A.R.S. §15-1642 regarding the Arizona Financial Aid Trust Fund.

PROGRAMS CONSENT AGENDA

*Fall 2007 Enrollment Report (Board Item #20)

The Board reviewed the Fall 2007 headcount and full-time equivalent enrollments for the Arizona University System.

*Approval of Proposed New ABOR Policy 4-318 “Mathematics, Science and Special Education Teacher Student Loan Program,” to Create and Implement the Loan Forgiveness Program for Mathematics, Science and Special Education (Second Reading) (Board Item #21)

The Board approved the proposed Policy 4-318 to create the Mathematics, Science and Special Education Loan Program for students who become teachers of mathematics, science or special education, in compliance with A.R.S. §15-1782.

*2007 Progress Report on Articulation and Transfer for Arizona Postsecondary Education (Board Item #22)

The Board approved the 2007 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.

HUMAN RESOURCES CONSENT AGENDA

*Approval of Extension to Multiple Year Employment Contract for the Women’s Volleyball Team Head Coach (UA) (Board Item #25)

The Board approved the extension of the Multiple Year Employment Contract for David C. Rubio as Head Coach of the University of Arizona Women’s Volleyball Team for one additional year, through December 31, 2008.

*Approval of Multiple Year Employment Contract for the Women’s Golf Team Head Coach (UA) (Board Item #26)

The Board approved the Multiple Year Employment Contract for Shelly Haywood as Head Coach of the University of Arizona Women’s Golf Team for the term beginning January 1, 2008, through June 30, 2010.

*Review of Revision to ABOR Policy 6-901 “Salary Increases” (Second Reading) (Board Item #27)

The Board approved the proposed revision to Policy 6-901, “Salary Increases.” The revision will increase the dollar limit for performance-based incentives to match a recent increase in this amount under Arizona law.

CAPITAL CONSENT AGENDA

*Approval of FY 2008 Capital Development Plan (CDP) Amendment to add Bryant Bannister Tree-Ring Archive Building Project, and Authority to Expend above Board Policy Limits for Professional and Consultant Services (UA) (Board Item #35)

The Board approved the University of Arizona’s request to amend its FY 2008 Capital Development Plan (CDP) to incorporate one new project, Bryant Bannister Tree-Ring Archive Building, and authorization to expend more than the 3%, or $500,000, Board policy limit on professional and consultant services related to preparing for Project Implementation Approval.

*Authority to Sell System Revenue Bonds to Finance the Hazardous Waste Facility Enclosure Project and the West Stadium Renovation for the Tree Ring Lab (UA) (Board Item #36)

The Board approved the University of Arizona’s request to sell System Revenue Bonds to finance the Hazardous Waste Facility Project and the West Stadium Renovation for the Tree Ring Lab to produce sufficient proceeds not exceeding $5.154 million and to pay the costs of issuance of the Bonds. Both projects received Combined Project Implementation Approval and Project Approval in September 2007.

*Project Implementation Approval for New Indoor Basketball Practice Facility, including Acquisition of the Existing Athletes’ Performance Institute Facility (ASU) (Board Item #37)

The Board approved Arizona State University’s request for Project Implementation Approval for a new $19.5 million Indoor Basketball Practice Facility to be named the Weatherup Center. The project is combined with the acquisition of the Athletes’ Performance Institute (API) at an estimated cost of $2.5 million to provide support facilities for the new practice facility.

*Approval of Sale of Real Property to PCCP Constellation, LLC, and Waiver of Board Policy requiring Public Auction (ASU) (Board Item #38)

The Board approved Arizona State University’s request for the sale of vacant land to PCCP Constellation, a Delaware limited liability company. The 0.0731 acre parcel owned by ASU is adjacent to land owned by PCCP Constellation. The sale to PCCP Constellation requires a waiver of Board policy requiring a public auction for the sale of real property.

*Approval of Lease of Real Property at the ASU Polytechnic Campus to the East Valley Institute of Technology (EVIT) (ASU) (Board Item #39)

The Board approved Arizona State University’s request to lease 10 acres of vacant land at the Polytechnic campus to the East Valley Institute of Technology (EVIT) for 35 years with an option for an additional 10 years. EVIT will pay $1 per acre per year and assume responsibility for infrastructure and site improvements.

CALL TO THE AUDIENCE

Per Board Policy 1-114, time has been set aside for Call to the Audience, an opportunity for people to address the entire Board in a public setting to express their views or concerns.

Regent Bulla introduced Tom Browning, CEO of Greater Phoenix Leadership (GPL). Regent Bulla stated that GPL has been a driving force on educational issues in Phoenix for a number of years. Tom Browning, who is retiring at the end of January, then introduced Tom Franz, his successor as CEO. Tom Franz stated that he and GPL would continue their commitment to education in the State of Arizona and continue to work with the universities.

Judy Gignac, Esther Capin and Jamie Matanovich - UMC Board members spoke in favor of the UMC Bylaw Changes and the Board members names that were being put forward for appointment or reappointment. Ms. Gignac stated that 16 of the 21 members of the UMC Board members will now have term limits. Of the 16 members, 32% are female, 13% are Hispanic, and 7% are Native American. Also, 25% of the members are from non-metro counties, 50% are from Pima County and 25% are from Maricopa County.

Michael Slugocki - Vice Chair, Arizona Students' Association. Spoke in favor of the Academic Affairs Committee and allowing a student to sit on the committee.

Michael J. Demeure - University of Arizona College of Medicine. Spoke about the Medical Service Plan stating that it needs to be reconsidered and revised. UPH is a very different entity than it was in 1985. He stated that he believes UPH does not serve the needs or support the interests of the College of Medicine.

Juan Daniel Rameriz and Enrrique Moreno (through translator Emmanuel Gallardo, member of the Social Justice Coalition) - Juan Rameriz and Enrrique Moreno are workers at Great Western Erectors and this company has worked for Arizona State University. They stated that the company was a bad company and has treated them very badly. They feel the workers need this opportunity to speak to President Crow and all the Regents to express their frustration with the company. There are many problems with this company, dehydration, and maltreatment of the workers. A private investigator has been hired to investigate the company but they are not sure that the investigator will find out what these workers really go through. Hiring this private investigator is saying to the workers that the university doesn't believe the workers and is calling them liars. This is a fight for labor rights and a fight for human rights. We are asking for your help and support. Enrrique Moreno also added that he personally suffered from dehydration while on the job and that the company did not provide him medical assistance. He believes the company should have a company doctor or someone to assist workers.

RESOURCES COMMITTEE

Regent Calderón chaired this portion of the meeting. He stated that Board Items #7, #8 and #9 would be taken out of order to facilitate the flow of items.

Amended and Restated Article V, “Board of Directors,” of Bylaws of University Medical Center Corporation (UMCC) (Board Item #7)

Nancy Tribbensee, Kathy Bedard, and Roy Kyle (attorney for UMCC) joined the meeting for this discussion.

Regent Calderón stated that the University Medical Center Corporation was requesting approval of an amendment to Article V, “Board of Directors,” of their Bylaws which limited the terms of its directors and restated language regarding appointments and reappointments of directors.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved the amended and restated Article V, “Board of Directors,” of the Bylaws of University Medical Center Corporation, as presented in the Executive Summary

Appointments and Reappointments to University Medical Center Corporation (UMCC) Board of Directors (Board Item #8)

Kathy Bedard joined the meeting for this discussion.

Regent Calderón stated that the University Medical Center Corporation was requesting approval of the appointments to its Board of Directors of John M. Bernal and Daniel N. Lewis, with four-year terms from January 2008 to October 2011, and the reappointments of Laura T. Almquist and Gary E. Munk to additional four-year terms.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved the appointments of John M. Bernal and Daniel N. Lewis as new members of the UMCC Board of Directions and the reappointments of Laura T. Almquist and Gary E. Munk for an additional four-year terms as presented in the Executive Summary.

Proposed Revision to Board Policy 3-301 “University Investments” (First Reading) (Board Item #9)

Nancy Tribbensee, Kathy Bedard, Carol Campbell and Kathe Shinham joined the meeting for this discussion.

Regent Calderón stated that the Board was being asked to review a proposed revision to its Policy 3-301, University Investments, to provide flexibility to the universities for investment of university funds consistent with the scope of the Arizona State Treasurer’s investment policy.

Kathy Bedard stated that this policy was being revised to align the investment authority granted to the universities for their university operating and endowment funds with the same authority held by the Arizona State Treasurer for investment of university funds.

Regent Calderón stated that he wondered if the Board needed to institute a socially responsible investment policy and if anyone was interested in having a policy like that they should contact the central office.

Setting Base Tuition and Mandatory Fees for the 2008-2009 Academic Year (Board Item #1)

Gale Tebeau joined the meeting for this presentation.

Regent Calderón stated that the Board was being requested to set resident and nonresident base tuition rates and mandatory fees for undergraduate and graduate students for the 2008-2009 academic year. This item does not include proposals for differential tuition, program fees, class fees, and other fees. Those items will be addressed in agenda item #2.

Regent Calderón stated that, as Chair of the Resources Committee, he organized campus meetings with students at each university who represented a good cross-section of the general student population, to discuss the impact of tuition and fee increases. Regent Boice joined the student focus group discussions at NAU and the UA, while Regent Calderón attended the meetings at NAU and ASU. These discussions were very productive. A resounding statement from students was that affordability was more important than predictability and that financial aid was also very important.

The Board held a tuition hearing on November 29, and the Regents heard from students all around the state, including student leaders at each campus, and from the university presidents.

Regent Calderón then asked each President to present his recommendation.

President Crow stated that ASU's tuition proposal was based on three part logic. The first element is that tuition revenue is the principle source of new revenue for academic excellence and access. The state resources that are received are largely for growth of the institution. The second part of the logic is that the tuition proposal is built on the co-investment model. The university invests in the life and success of the student, the state invests in the life and success of the student and the student and his family invests in the life and success of the student. The third part of the logic is that ASU remains committed to helping every student who needs help that can demonstrate that need. The tuition proposal for continuing resident undergraduate students is a 5% increase, with a planned 5% increase per year for their completion timeframe. For new undergraduate resident tuitions an increase in tuition of 12.2%, with a 5% planned increase per year beyond that entry year. For nonresident undergraduate students a 5% increase. For resident graduate students a 9% increase and for nonresident graduate students an 8% increase.

President Haeger stated that NAU depends upon tuition and state appropriations to continue to operate. NAU has been working with students and affordability and predictability are very important, but quality is important as well. The tuition proposal that is being put forward is about the quality of the education and the degree that students will receive. NAU will be offering a block tuition program which will, for entering freshman, raise tuition 14% for nonresident and 12% for resident students, but will stay the same for the next four years. The importance of the block tuition program is that students have an enormous incentive to complete their education in four years. Returning students will have a 7% increase. NAU is also asking to combine the Student Recreation Fee and Student Health Fee and then increase the fee by $50 for Fall 2008, $160 for Fall 2009, $130 for Fall 2010 and $80 for Fall 2011, bringing the total fee to $500 per year by Fall 2011.

President Shelton stated that the University of Arizona request was for a 9.3% increase in tuition for resident undergraduate students at the main campus, a 7% increase for resident undergraduate tuition at the University of Arizona South, a 14.6% increase for nonresident undergraduate students, a 9.4% increase for resident graduate students, a 14.4% increase for nonresident graduate students, and a new student services fee of $80 per year to be phased in over two years. Maintaining quality is a constant and expensive act of vigilance. President Shelton stated that the funds received from this increase with be used for student access, student learning and student success.

Regent Calderón then recognized the students and student leaders who were present and thanked them for their thoughtful and hard work on this very difficult issue.

Regent DuVal stated that he believed that the tuition increases should not be approved without increasing the financial aid set-aside. He stated that he felt that financial barriers should be addressed as aggressively as possible and therefore he suggested that the financial aid set-aside be increased from 14% to 15% for the 2008-2009 academic year for all three universities. After discussion, Regent Calderón stated that he would include that language in each of the motions.

Regent Stuart moved and Regent Bulla second the motion that in regards to Arizona State University the Board approve the following:

For continuing (or current) resident undergraduate students at all campuses of Arizona State University, the base tuition increase of 5% beginning Fall 2008, and thereafter increase base tuition by 5% annually until 5 years after admission as a freshman (or equivalent to that length of time based on the student's academic level at the time of entry to the university; e.g., sophomores - 4 years; juniors - 3 years; seniors - 2 years), assuming no unusual levels of inflation and no substantial change in the levels of state support; bringing the 2008-2009 base tuition for continuing resident undergraduate students to $5,063 at the Tempe and Downtown Campuses; and $4,851 at the Polytechnic and West campuses;

For new and transfer resident undergraduate students at ASU Tempe and Downtown Campuses, the base tuition increase of 12.2% and at the West and Polytechnic campuses the base tuition increase of 17.1%; and thereafter increase base tuition by 5% annually until 5 years after admission as a freshman (or equivalent to that length of time based on the student's academic level at the time of entry to the university; e.g., sophomores - 4 years; juniors - 3 years; seniors - 2 years), assuming no unusual levels of inflation and no substantial change in the levels of state support, bringing the 2008-2009 base tuition for new and transfer resident undergraduate students to $5,409 at all campuses of ASU;

For nonresident undergraduate students at all ASU campuses the base tuition increase of 5%, bringing the 2008-2009 base tuition for nonresident undergraduate students at all ASU campuses to $17,697;

For resident graduate students at all ASU campuses the base tuition increase of 9%, bringing the 2008-2009 base tuition for resident graduate students at all ASU campuses to $6,789;

For nonresident graduate students at all ASU campuses the base tuition increase of 8 percent, bringing the 2008-2009 base tuition for nonresident graduate students at all ASU campuses to $19,354.

For the mandatory financial aid set-aside an increase from 14% to 15% for the 2008-2009 academic year;

For the mandatory information technology fee for students at all ASU campuses, an increase of $50 for a total mandatory information technology fee of $100 per year beginning Fall 2008; and

For students at all ASU campuses approve a new student facilities/student program fee in the amount of $150 per year, pro-rated for part-time students, beginning Fall 2008, with the uses of this fee to be determined by a joint university and student advisory group.

Regent DeConcini stated that he was in a quandary, but it seemed to him that the increases being proposed were exorbitant under the conditions the state appears to be facing. The Legislature in this state has neglected the universities in the past and he believes it is time for the Board to be far more aggressive with the Legislature and put the burden back on the Legislature.

Regent DeConcini then moved a substitute motion which stated that there be no increase at Arizona State University in resident undergraduate tuition for new or continuing students for the 2008-2009 academic year, on the condition that the general fund appropriate for the Arizona University System for fiscal year 2008-2009 increases by 17% over and above the appropriation for the 2007-2008 fiscal year; and that if the Legislature fails to increase the general fund appropriation by at least 17%, then the 2008-2009 resident undergraduate tuition for new and continuing students shall increase by 5% over the previous year and that the mandatory financial aid set-aside by increased from 14% to 15% for the 2008-2009 academic year.

Regent Venezia stated that she felt it was appropriate to put pressure on the Legislature to fund tuition. She stated that she was very impressed with the students and their approach last year with the Legislature and she believed that the students would be able to get the money from the Legislature again this year.

Regent Calderón stated that he had been told by various legislators and the Governor's office that the state was going to be facing a serious budget shortfall and he does not believe that the Legislature will be able to support the universities in the way that must be done to make this motion work and with that he will be voting no.

Regent Stuart stated that he would be voting no on this motion as well. He believed that a motion of this kind would be seen as delegating the Board's responsibility to set tuition to the legislature and the Board could not do that. He stated that the motion as made was conditional upon allowing the legislature to decide what rate of tuition would be set by this Board.

Regent Mariucci stated that the state legislative environment and the fiscal environment of this state is something that we cannot ignore. It is so significant right now and this is a wonderful effort of the students to advocate for their own interest and fight for the quality of their education. But, as we elevate the discussion and debate going forward into the next legislative session, she believes what the Board needs to focus on is the value proposition of education. What you pay vs. what it costs the university to provide. She stated she would like to see future discussions address this issue which will then potentially lead to differentiated tuition. She believes the Board needs to determine what it spends on different program relative to what students pay for the program. Regent Mariucci stated that she would be voting no on Regent DeConcini's motion.

Regent Martinez stated that he felt the same argument that Regent Mariucci made could be made against fixed/block tuition. He stated that considering what was going on with the budget students were almost guaranteed an additional increase in tuition because the motion was being tied to the level of state funding received with the portion about unusual levels of inflation and no substantial change in the levels of state support.

President Crow stated that the university was confident that this model would work in the way it was proposed. Substantial change in resources means a substantial decrease, a taking away of resources that were already committed to the institution.

Regent Bulla commended the students for their efforts. He stated that he agreed with Regent Stuart that the Board had a duty to set tuition. Tuition has increased substantially, but if you look at the whole picture; the set aside, the financial aid that is generated, if you adjust everything for inflation the cost has not really changed that much. Tuition is a very reasonable investment and he agrees with President Crow that the student needs to make an investment as well. This is a very difficult process for the Regents, but he believes the Regents must make this decision, not the legislature.

Regent DeConcini stated that he strongly disagreed with the notion that his motion would be abdicating or giving up the Board's constitutional direction. If this substitute motion would pass, tuition for ASU would be $4821, set by this Board. The Board is not asking the legislature to set tuition. The Board would be setting tuition. We are saying to the legislature that if they give us an increase of 17% over what we received last year, then the Board would not have to raise tuition and if they don't, the Board would be raising tuition to $5063. He stated that he does not believe that the Board would be forgoing its constitutional duties. He stated that it has been his experience that certain things get funded even in tough times.

Upon motion by Regent DeConcini, seconded by Regent Venezia, the Board failed to approve Regent DeConcini’s substitute motion by roll call vote. The roll call was as follows: Regents Bulla, Calderón, DuVal, Mariucci, Palacios, Stuart and Boice voted against the motion; Regents DeConcini and Venezia voted in favor of the motion.

Regent Calderón stated that, regarding the statement in the original motion about facing uncertain conditions down the road, if the Board he would like the Board to consider asking the Presidents to come back with non-student, non essential cuts in their budgets. If the university system does face a budget recession, he stated that he would like to see cuts that didn't directly affect students.

Upon motion by Regent DeConcini, seconded by Regent Venezia, the Board failed to approve a substitute motion by roll call that there be a 5% increase in resident undergraduate tuition at Arizona State University for the year 2008-2009. Roll call was as follows: Regents Bulla, Calderón, DuVal, Mariucci, Palacios, Stuart, Boice voted against the motion; Regents DeConcini and Venezia voted in favor of the motion.

Upon motion by Regent Venezia, seconded by Regent DeConcini, the Board approved by roll call the motion to address the portion of the original motion that deals with a new student facilities/student program fee at all ASU campuses in the amount of $150 per year separately. Roll call was as follows: Regents Bulla, Calderón, DeConcini, DuVal, Stuart, Venezia and Boice voted in favor of the motion; Regents Mariucci and Palacios voted against the motion.

Regent Mariucci then discussed her intent to make a motion to define what a substantial change in levels of state support would be so that there would be a top and bottom either way so that the university and the Board would not have to live with a block tuition proposal that would hamstring the Board's ability to make good decisions for the benefit of students and the fiscal management of the university.

Regent Bulla stated that he felt another issue could arise if the funding level from the state remained the same, but the student population grew, so in fact the university was getting the same amount of dollars, but there were more students, which would in reality be getting less money per student. He asked if a scenario like that would trigger the president's ability to bring fixed/block tuition back to the Board. Regent Boice stated that matter would have to come back to the Board.

Regent Mariucci then made the motion to amend the original motion to define substantial change in levels of state support to mean any decrease to the current level of state funding. Regent Boice then asked Regent Mariucci to restate the motion, at which time she rephrased her motion, which was seconded by Regent DeConcini to amend the original motion, relative to the definition of substantial change in levels of state support, relative to the block tuition pricing, to be defined as any rescission in dollar amount of state funding from the current year as a base line.

Regent Haeger stated that there were many issues concerning tuition, one being affordability, the other being predictability. He believed that with this motion the predictability portion of tuition would get lost. It is reality that the economy swings, sometimes dramatically, from one year to the next. He stated that this was a pilot program for next fall incoming freshman. He believed the risk was very small because you could always reset for the next cohort.

After discussion Regent Mariucci again restated her motion stating that this motion was to amend the original motion to define substantial change in levels of state support to mean any rescission in state support or alternatively any increase in state funding over 17% over prior years. Regent DeConcini seconded the motion. Upon motion by Regent Mariucci, seconded by Regent DeConcini, the Board approved by roll call the motion to define substantial change in levels of state support to mean any rescission in state support or alternatively any increase in state funding over 17% over prior years. Roll call was as follows: Regents Calderón, DeConcini, DuVal, Mariucci, Venezia and Boice voted in favor of the motion; Regents Bulla, Palacios and Stuart voted against the motion.

Upon motion by Regent Stuart, seconded by Regent Bulla, and amended as stated above, the Board approved the following motion by roll call.

For continuing (or current) resident undergraduate students at all campuses of Arizona State University, the base tuition increase of 5% beginning Fall 2008, and thereafter increase base tuition by 5% annually until 5 years after admission as a freshman (or equivalent to that length of time based on the student's academic level at the time of entry to the university; e.g., sophomores - 4 years; juniors - 3 years; seniors - 2 years), assuming no unusual levels of inflation and no substantial change in the levels of state support, (defined as any rescission in state support or alternatively any increase in state funding over 17% over prior years;) bringing the 2008-2009 base tuition for continuing resident undergraduate students to $5,063 at the Tempe and Downtown Campuses; and $4,851 at the Polytechnic and West campuses;

For new and transfer resident undergraduate students at ASU Tempe and Downtown Campuses, the base tuition increase of 12.2% and at the West and Polytechnic campuses the base tuition increase of 17.1%; and thereafter increase base tuition by 5% annually until 5 years after admission as a freshman (or equivalent to that length of time based on the student's academic level at the time of entry to the university; e.g., sophomores - 4 years; juniors - 3 years; seniors - 2 years), assuming no unusual levels of inflation and no substantial change in the levels of state support, bringing the 2008-2009 base tuition for new and transfer resident undergraduate students to $5,409 at all campuses of ASU;

For nonresident undergraduate students at all ASU campuses the base tuition increase of 5%, bringing the 2008-2009 base tuition for nonresident undergraduate students at all ASU campuses to $17,697;

For resident graduate students at all ASU campuses the base tuition increase of 9%, bringing the 2008-2009 base tuition for resident graduate students at all ASU campuses to $6,789;

For nonresident graduate students at all ASU campuses the base tuition increase of 8 percent, bringing the 2008-2009 base tuition for nonresident graduate students at all ASU campuses to $19,354.

For the mandatory financial aid set-aside an increase from 14% to 15% for the 2008-2009 academic year;

For the mandatory information technology fee for students at all ASU campuses, an increase of $50 for a total mandatory information technology fee of $100 per year beginning Fall 2008.

Roll call was as follows: Regents Bulla, Calderón, DuVal, Mariucci, Palacios, Stuart and Boice voted in favor of the motion; Regents DeConcini and Venezia voted against the motion.

Regent Venezia made a motion, seconded by Regent DeConcini, that the Board approve a student activity fee of $50 ($25 per semester) and that the funds generated by this fee be allocated by ASASU to support student priorities. ASASU will distribute the funds in accordance with an itemized budget submitted to ASASU to the ASU administration.

President Crow stated that the student leadership at ASU constructed a mechanism which calls for formation of a student activity council or board made up of the five student government leaders and five students selected from the various legislative bodies of the student government, three administrators and one ex-officio member is being left out of the picture with this motion. He stated that he felt that was a critically important part of the process. President Crow also stated that the fee that was originally being proposed was, in fact, a very low fee compared to other universities.

President Crow stated that the students and the administration had agreed to five guiding principles: (1) the fee should benefit the students paying the fee; (2) on occasion there will be a need for a university-wide student-services project or they may be a need on a specific campus due to a funding deficit; (3) a student fee allocation committee should solicit and review proposals for both sustainable and annual funding for student programming needs as well as student use facility needs; (4) student services fee revenue should only be used for non-academic expenses that are difficult to support with tuition or state dollars (meaning don't commingle these dollars - student services fee should be used for funding student services, facilities and extra curricular activities; academic expenses such as advising, tutoring and academic coaching should be funded through tuition and state revenues; and (5) any and all future student fee proposals must first be reviewed by the student allocation board. The students agreed to the following funding priorities (with a $25 fee or less): ASASU governing bodies on each of the campuses and the graduate students; student programming and activities; higher education advocacy such as APER and Arizona Students Association; funding for clubs and organizations and student health and wellness. Should a fee of more than $25 be assessed then the following items would be considered: campus recreation; capital improvements for the purpose of providing space for student services; and student and university submitted proposals for the improvement of student life. The structure of the Board is organized and set-up as the Student Fee Allocation Board. ASASU invests this Board with the responsibility of continually investigating student priorities and making funding allocation decisions by consensus. The members of the committee would include five student government presidents, five student members each confirmed by the legislative branch of each student government; three appointments by the president of the university; and the Chief Financial Officer of the university as an ex-officio member.

Regent Bulla stated that he was concerned about the lack of funds on the west campus, and he said that he was very concerned that $50 would not provide enough funds to take care of all the campuses.

Regent Calderón stated that he was uncertain what the students wanted on this issue. He has heard many different things from many different students and student groups. Regent DeConcini stated that he felt the motion that Regent Venezia made would give students more control over the fee.

Regent Stuart stated that he was going to make a substitute motion. He stated that he had met with the student leaders and he felt that the amount was not the issue, but student control of the fee was the issue. He felt that the students wanted to continue discussions with President Crow to give students input into how the fee was used.

Upon motion by Regent Stuart, seconded by Regent DuVal, the Board, by roll call vote, did not pass the following motion: the student activity fee in the amount of $50 be assessed, but that the mechanism by which the $50 is distributed to campus organizations and groups and for purposes set out by the students, be the mechanism that the students brokered, a joint university and student advisory group. Roll call vote was as follows: Regents Calderón, DuVal, Stuart and Boice voting in favor; and Regents Bulla, DeConcini, Mariucci, Palacios and Venezia voting against.

Regent Venezia's original motion was then considered. Upon motion by Regent Venezia, seconded by Regent DeConcini, the Board approved a student activity fee of $50 ($25 per semester) by roll call vote. The funds generated by this fee shall be allocated to ASASU to support student priorities. ASASU will distribute the funds in accordance with an itemized budget submitted by ASASU to the ASU administration. The roll call vote was as follows: Regents Calderón, DeConcini, DuVal, Mariucci, Palacios, Stuart, Venezia and Boice voted in favor of the motion; Regent Bulla voted against the motion.

The next order of business was tuition for Northern Arizona University.

Regent DeConcini asked if any of the Regents had a change of heart regarding his motion for tuition at ASU, if not he would not continue to make the motion even though he does have a continuing interest in the matter.

Upon motion by Regent DuVal, seconded by Regent Mariucci, the Board approved the following motion by roll call:

For continuing resident undergraduate students at the Northern Arizona University Flagstaff campus and continuing nonresident undergraduate students at all Northern Arizona University campuses, increase base tuition by 7 percent beginning Fall 2008, bringing the 2008-2009 base tuition for continuing resident undergraduate students to $4,916; and to $15,245 for continuing nonresident undergraduate students at all NAU campuses;

Increase resident undergraduate base tuition at NAU statewide sites by 5 percent, bringing the 2008-2009 resident undergraduate base tuition to $4,731;

Establish a Block Tuition Pilot Program for first-time, full time, new undergraduate and transfer students at the NAU Flagstaff campus. For Fall 2008, increase base tuition for all new and transfer resident undergraduate students by 12 percent, and for all new and transfer nonresident undergraduate students by 14 percent, for a total base tuition of $5,145 for new and transfer resident undergraduate students, and $16,243 for new and transfer nonresident undergraduate students. These base tuition rates will remain at this level through the 2011-2012 academic year;

Increase graduate tuition at all Northern Arizona University campuses and sites by 7 percent, for a total resident graduate base tuition of $5,310; and a total nonresident graduate base tuition of $15,670; and

For the mandatory financial aid set-aside an increase from 14% to 15% for the 2008-2009 academic year;

Approve combining Northern Arizona University’s existing $50 Student Recreation Center Fee and its $30 Student Health Fee to create a new multi-year fee. For Fall 2008, the newly combined fee, currently $80 per year, will increase by $50 to $130. For Fall 2009, Fall 2010, and Fall 2011, the fee would increase by $160, $130, and $80 per year, respectively, bringing the total fee to $500 per year by Fall 2011.

Roll call was as follows: Regents Bulla, Calderón, DuVal, Mariucci, Palacios, Stuart and Boice voted in favor of the motion; Regents DeConcini and Venezia against the motion.

Regent Calderón stated that he wished to have it known that if it weren't for the dire economic straights of the state at this time, he probably would have supported Regent DeConcini's position.

Regent Calderón stated that the Board would now consider tuition at the University of Arizona.

Upon motion by Regent DuVal, seconded by Regent Mariucci, the Board approved the following motion upon a roll call vote:

Increase resident undergraduate base tuition at The University of Arizona main campus by 9.3 percent for Fall 2008, for a base resident undergraduate tuition of $5,274;

Increase resident undergraduate base tuition at The University of Arizona South campus by 7 percent for Fall 2008, for a base resident undergraduate tuition of $4,603;

Increase nonresident undergraduate base tuition at all campuses of The University of Arizona by 14.6 percent for Fall 2008, for a nonresident undergraduate base tuition of $18,408;

Increase resident graduate base tuition at all campuses of The University of Arizona by 9.4 percent, to $6,064 for 2008-2009;
Increase nonresident graduate base tuition at all campuses of The University of Arizona by 14.4 percent, to $18,701 for 2008-2009;

For the mandatory financial aid set-aside an increase from 14% to 15% for the 2008-2009 academic year; and
Approve a new Student Services Fee in the amount of $80 per year, to be phased-in over two years. Beginning Fall 2008, the fee will be $40 per year, increasing by $40 per year in Fall 2009.

Roll call was as follows: Regents Bulla, Calderón, DuVal, Mariucci, Palacios, Stuart and Boice voted in favor of the motion; Regents DeConcini and Venezia voted against the motion.

Approval of Differential Tuition, Special Program Fees, Special Class Fees, and Other Fees for the 2008-2009 Academic Year (Board Item #2)

Mark Denke, Betty Capaldi, Liz Grobsmith and Eugene Sander joined the meeting for this presentation.

Regent Calderón stated that the Board was being asked to approve the universities’ requests for differential tuition, special program fees, special class fees, and other fees for the 2008-2009 academic year.

Mark Denke stated that the Board had adopted criteria for the use of differential tuition, special program fees, class fees and other fees and these fees meet the criteria. Periodic internal audits are done to assure fee collections and expenditures and report any findings to the Board. All fee requests are summarized in Table 1 of the executive summary.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board unanimously approved, by roll call vote, the differential tuition, special program fees, special class fees, and other fees for the 2008-2009 academic year, as requested by Arizona State University, Northern Arizona University, and the University of Arizona as presented in this Executive Summary. The roll call vote was as follows: Regents Bulla, Calderón, DeConcini, DuVal, Mariucci, Palacios, Stuart, Venezia and Boice voted in favor of the motion.

Setting the University of Arizona College of Medicine Tuition for AY 2008-2009 (Board Item #3)

Regent Calderón stated that the next order of business was to set resident tuition for the University of Arizona College of Medicine for AY 2008-2009. He 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. During the Fall 2006 semester, the College of Medicine examined its tuition policy and implemented a new approach for the 2007-2008 academic year. The College of Medicine requests approval of this approach for a second year.

President Shelton stated that last year the students of the College of Medicine, along with the faculty and administration developed a protocol, which was endorsed by the Board last year. The protocol is that first year students come in at the 33rd percentile of their public college of medicine peers and following that the increases are limited to the higher education price index. That is the same proposal that is before the Board today.

Regent Calderón moved, and Regent Bulla seconded that the Board approve the AY 2008-2009 tuition at the University of Arizona College of Medicine, as presented in the Executive Summary.

Regent DeConcini then proposed an amendment to the motion directing the University College of Medicine and the University of Arizona to submit recommendations for nonresident tuition and recommendations for the number of out-of-state students that will be brought in for the year 2009-2010. Regent Calderón seconded the amendment.

Regent Stuart stated that he felt the College of Medicine should, in the future, have a plan for acceptance of nonresident students, but he felt that the College of Medicine was in transition at this time and he believed there should be more planning and the College of Medicine should come up with a recommendation, and a time frame and not have the Board dictating when they should start taking nonresident students.

Upon motion by Regent DeConcini, seconded by Regent Calderón, the Board approved, by roll call vote, the amendment to the tuition motion directing the University College of Medicine and the University of Arizona to submit recommendations for nonresident tuition and recommendations for the number of out-of-state students that will be brought in for the year 2009-2010. The roll call vote was as follows: Regents Calderón, DeConcini, DuVal, Venezia and Boice voted in favor of the amendment; Regents Bulla, Mariucci, Palacios and Stuart voted against the amendment.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved, by roll call vote, the AY 2008-2009 tuition at the University of Arizona College of Medicine, as presented in the Executive Summary and directed the University College of Medicine and the University of Arizona to submit recommendations for nonresident tuition and recommendations for the number of out-of-state students that will be brought in for the year 2009-2010. The roll call vote was as follows: Regents Bulla, Calderón, DeConcini, DuVal, Mariucci, Palacios, Stuart, Venezia, and Boice voted in favor of the motion.

Regent Boice that stated that he felt the Board should give serious consideration to having a taskforce made up of students, administrators and Regents to study tuition, university financing, and state support and where tuition fits into the process so that students can better understand how universities are financed. Regent Boice asked if anyone had an objection and hearing none, stated that a taskforce would be formed.

FY 2008-2011 Technology and Research Initiative Fund Strategic Investments (TSI) Budget (Board Item #4)

Kathy Bedard joined the meeting for this presentation.

Regent Calderón stated that the Board was being asked to approve the FY 2008-2011 TRIF Strategic Investments (TSI) Budget in the amount of $10.9 million. This budget will support two research initiatives in the area of sustainable environments and two initiatives for the delivery of higher education in rural and underserved areas of Arizona.

Regent Calderón further stated that it is the continuing policy of the Resources Committee that all projects that receive TRIF funding require a business plan, and a report back to the Resources Committee and the Board. He further stated that is these two initiatives are approved they will have to provide a business plan and will be required to report back to the Board.

Kathy Bedard stated that last year the Board designated $2.9 million in FY 2006 over-realized TRIF revenue and $2.0 million in FY 2008 TRIF revenue to create a TRIF Strategic Investments (TSI) fund to address significant system wide issues. In Fall 2007, the Presidents of the universities submitted six proposals totaling $30.5 million for TSI funding. The proposals were reviewed by the Board President and the Resources Committee and as a result of this process, a proposed FY 2008-2011 budget in the total amount of $10.9 million is being presented for Board approval. Projects proposed for funding are (1) ABOR Solar Energy Initiative (ASU and UA); (2) Promoting Forest Health in Arizona (NAU); (3) Higher Education in Rural Southern Arizona: A New Model for Leveraging Community Investment (UA); and (4) Statewide Expansion at NAU-Yuma Campus (NAU).

Upon motion by Regent Calderón, seconded by Regent Venezia, the Board unanimously approved the proposed FY 2008-2011 TRIF Strategic Investments budget in the total amount of $10.9 million, as presented in the Executive Summary.

Revised FY 2008 TRIF Regents Innovation Fund Budget (Board Item #5)

Kathy Bedard joined the meeting for this presentation.

Regent Calderón stated that the Board was being asked to approve a revised FY 2008 TRIF Regents Innovation Fund Budget in the amount of $2.7 million, to include a $500,000 allocation to support the Clinical and Translational Science Award (CTSA) effort in Arizona in FY 2008 and a commitment to provide an additional $2 million over the four-year period, FY 2009- FY 2012.

Kathy Bedard stated that this was a revised budget, the original having been approved in June 2007. This revised budget provides a $500,000 increase to support the Clinical and Translational Science Award (CTSA) effort and asks the Board to commit $2 million of FY 2009-2012 TRIF Regents Innovation Funds to support the Health Research Alliance Arizona Clinical and Translational Science Award effort.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board unanimously approved the revised FY 2008 TRIF Regents Innovation Fund budget in the amount of $2.7 million, and commit $2 million of FY 2009-2012 TRIF Regents Innovation Funds to support the Health Research Alliance Arizona Clinical and Translational Science Award effort, as presented in the Executive Summary.

Proposal for Revision of Board Policies on Intellectual Property and Technology Transfer and Introduction of New Policy on Conflict of Interest (Board Item #6)

Nancy Tribbensee joined the meeting for this presentation.

Regent Calderón stated that the Board was being asked to consider and provide guidance on a proposal for revision of Board policies on Intellectual Property (6-908) and Technology Transfer (6-909.10) and for the introduction of a new policy on conflict of interest.

Nancy Tribbensee stated that the Board had asked each President to designate an individual to participate on a work group to recommend changes to current Board administration of intellectual property and technology transfer. The members of the work group are Paul Ward (ASU), Patrick Jones (UA), Lee Drickamer (NAU), and Nancy Tribbensee (CO). The work group will be bringing their proposals back to the Board at a future meeting.

Regent Boice stated that he thought the Board would be interested in learning more about tech transfer and what we are doing and how does it work.

PROGRAMS COMMITTEE (Chair: Regent Stuart)

Regent Stuart chaired this portion of the meeting.

Academic Affairs Committee Charter and Review of Proposed Changes to ABOR Policies 2-203 “Academic Degree Program Planning and Implementation,” 2-204 “Academic Program Changes,” 2-208 “Academic Program Review,” and 2-301 “Organizational Changes” (First Reading) (Board Item #17)

Stephanie Jacobson, Betty Capaldi, Liz Grobsmith and Gene Sander joined the meeting for this presentation.

Regent Stuart stated that the Board was being asked to delegate authority to the Academic Affairs Committee, approve a Committee charter, and review, on first reading, policies related to the responsibilities of the Committee. He further stated that in September the Board approved the creation of an Academic Affairs Committee as a means of improving oversight of the academic initiatives. A planning committee was appointed to develop a charter and work out the details about how the Academic Affairs Committee would function. The planning committee included Regent DeConcini as chair, Regents Calderón and Venezia, the three university provosts and Joel Sideman. Regent Stuart served as the group's facilitator.

Regent DeConcini discussed the outcomes of the October 26 planning committee meeting. He stated that the meeting centered around three main topics: (1) roles and responsibilities of the Academic Affairs Committee, (2) a committee charter, and (3) Board policies and what might need to be changed in the policies. He stated that one of the primary reasons to have an Academic Affairs Committee was to improve the Board's oversight role; to insure that regents have the critical information that is needed to execute their fiduciary responsibilities. The Committee's role and how the oversight process could be improved were discussed. The Committee's proposal is described in the materials in the Board book. Monitoring academic affairs would be based on a new Academic Strategic Plan. The plan would be developed annually by each university addressing key academic initiatives that are planned for the upcoming year and reporting on progress toward the goals from the previous year's plan. The committee would also use the three institutions plans to create a high level System wide Academic Strategic Plan. The Academic Strategic Plan and the System wide Academic Strategic Plan would serve as the mechanism by which the full Board executes its oversight responsibilities. Upon the recommendation of the Academic Affairs Committee, the plans would be presented to the Board annually for approval.

Regent DeConcini stated that while the details of the Academic Strategic Plan will need to be developed over the next few months, one requirement would be for it to link to the institution's strategic plan as well as to the new System wide Strategic Plan. He stated that he thought this approach would provide the Board with a much better context to understand the academic enterprise of the institutions and how decisions are made. One of the other reasons to establish the Academic Affairs Committee was to better align responsibilities where they best fit so, with an Academic Strategic Plan as a key component in providing oversight, the current Board responsibilities were reviewed by the planning committee and they determined which of those should be delegated to the Academic Affairs Committee and which might be delegated back to the institutions.

Regent DeConcini stated that the proposed charter reflects the general responsibility of the Academic Affairs Committee and addresses the membership of the committee. The planning committee is proposing that the voting members of the committee be four Regents, one of which is the voting Student Regent, and the three university provosts. The planning committee is also recommending two non-voting ex-officio positions: one from the faculty and one from the student body. It was also suggested by the planning committee that the Executive Director of the Board of Regents serve on the committee in an ex-officio capacity.

Regent Stuart stated that he was concerned about the language in the Charter for the Academic Affairs Committee which stated that a majority of the Regents on the Committee must concur in a committee action. Regent Stuart then suggested that the language be changed to state any issue not supported by a majority of the Regents present and voting must be referred to the full Board for further action. He felt that this would solve any problems that would arise because of quorum issues.

Regent Stuart stated that historically we have had standing committees that had members who participated, but who did not vote with the Regents. This is a departure from established tradition and culture. He further stated that he believed this voting procedure is the proper one.

Upon motion by Regent Stuart, seconded by Regent Calderón, the Board unanimously approved the Charter for the Academic Affairs Committee with the amendment of Item 5 as follows: 5. Any issue not supported by a majority of the Regents present and voting must be referred to the full Board for further action.

Dr. Watson voiced the support of the AFC to have a voting faculty member on this committee. Gene Sander stated that the faculty “owns” the curriculum and they must implement it. Liz Grobsmith stated that the proposals that come to the Board come through the faculty. The faculty does have a voice in the process because the proposals emanate from the faculty, and then go through the curriculum committee, an arm of the Senate.

Upon motion by Regent Bulla, seconded by, the Board unanimously approved the addition of the following language to the Charter of the Academic Affairs Committee: Any member of the Board of Regents may refer an item on the Academic Affairs Committee agenda to the full Board for review and consideration.

Upon motion by Regent Stuart, seconded by Regent DeConcini, the Board unanimously approved the delegation of responsibilities to the Academic Affairs Committee under the provisions of the Charter, and approved the phased-in implementation plan to act on behalf of the Board, as presented in the executive summary.

Stephanie Jacobson stated that also included in this item were the policy changes being submitted for first reading that would enable the Academic Affairs Committee to take on certain responsibilities. There is language that will codify the Academic Strategic Plan and there is other language that brings the policies up to date with practices that have developed over time.

Regent Stuart then stated that the Board would be taking Item #19 next.

Academic Program and Organizational Change Requests (Board Item #19)

Stephanie Jacobson, Liz Grobsmith and Betty Capaldi joined the meeting for this discussion.

Regent Stuart stated that the Board was being asked to approve the following requests to implement new academic programs: Arizona State University requests to implement: BA in Business, PhD in Human and Social Dimensions of Science and Technology, PhD in Community Resources and Development, PhD in Biomedical Informatics and Northern Arizona University requests to implement: BA in Business Administration, NAU-Yuma.

Regent Stuart stated that he believed the Biomedical Informatics Program at ASU would take a certain amount of funding from the state and asked how that was going to work. Provost Capaldi stated that the new funding would have allowed the university to move faster, but the program can move forward without the new funding and at this time the funding request has been removed from the budget.

Upon motion by Regent Stuart, seconded by Regent Palacios, the Board unanimously approved the five program requests for implement for Arizona State University and Northern Arizona University, as presented in the executive summary.

2006-2007 High School Report Card (Board Item #18)

Dan Anderson joined the meeting for this presentation.

Regent Stuart stated that the Board was being asked to review the annual report on the academic performance of Arizona’s 2005-2006 high school graduates enrolled in the universities in 2006-2007.

Dan Anderson stated that this report is an annual "feedback" report to the high schools, to let the high schools know how well their graduates performed when they came to the university. He pointed out some of the important findings in this report such as the GPA of high schools students who are admitted to the university with deficiencies is .5 lower than ones without deficiencies. If, as is being discussed by the State Board of Education and others, the high school students graduation qualifications are raised to be more consistent with the university admission standards, you could expect that that those students GPA's would then be higher in college.

Regent Boice asked if high school students were getting additional credit for taking advanced or more difficult classes. Dan Anderson stated that at this time students were not getting additional credit for more advanced classes.

PUBLIC AWARENESS COMMITTEE (Chair: Regent DuVal)

Cathy McGonigle joined the meeting for this presentation.

Update on Solutions Through Higher Education

Regent Boice stated that the Board would receive an update on Solutions Through Higher Education, the system wide public awareness campaign.

Cathy McGonigle stated that the Regents, the universities, ABOR staff and Reister have been working very hard on the campaign. Reister finished the production of the new video and it has been shown several times to approximately 700 people with great success. The slide presentation that supplements the video has been completed and rounds-out the presentations that are being taken around the state with the video. A website is being developed and by the end of December it should be completed. Cathy stated that everyone has really been focusing their efforts on the building of a coalition. There have been five meetings around the state. Regent's Boice, Calderón, DuVal and Venezia made presentations at those meetings and were received very well. After the first set of meetings, approximately 145 individuals and 50 organizations have signed up to be members of the coalition. A speaker's bureau is being developed which will help develop other speakers to go around the state and promote the coalition.

Regent Boice thanked everyone for all of their hard work, in particular Cathy McGonigle. He then stated that when Regent DuVal gave the slideshow, it was a premier performance.

HUMAN RESOURCES COMMITTEE (Chair: Regent Bulla)

Regent Bulla chaired this portion of the meeting.

Approval of the Seventh Amendment to the Arizona Board of Regents Optional Retirement Plan and Consideration of the Proposed Revisions to Board Policy 6-602 “Optional Retirement Plan” (First Reading) (Board Item #24)

Allison Vaillancourt and Nancy Tribbensee joined the meeting for this presentation.

Regent Bulla stated that the Board was being asked to approve the Seventh Amendment to the ORP to establish a voluntary Phased Retirement Program and to revise the definition of vesting effective July 1, 2008, and to consider, on first reading, proposed revisions to the policy related to the voluntary Phased Retirement Program. He stated that this item had been reviewed by the Human Resources Committee and as part of that review, each university was asked to seek faculty input and all received positive responses from their faculties.

Nancy Tribbensee stated that there had been a question regarding the Age Discrimination Act and the proposal was reviewed by outside legal counsel and it does not have any conflict with the Age Discrimination Act.

Allison Vaillancourt then stated that this policy change would amend the Optional Retirement Plan to allow a phased retirement option. She stated that an individual, at least age 62 and vested, would be able to enter into a phased retirement plan. In addition the vesting requirement would also be changed to expand the immediate vesting option.

Upon motion by Regent Bulla, seconded by Regent Calderón, the Board unanimously approved the Seventh Amendment to the Arizona Board of Regents Optional Retirement Plan as presented in the Executive Summary.

TECHNOLOGY OVERSIGHT COMMITTEE (Co-Chairs: Regent Palacios and Regent DeConcini)

Regent Palacios chaired this portion of the meeting.

Report from the Technology Oversight Committee (Board Item #28)

Regent Palacios gave a report on the October 12, 2007, Technology Oversight Committee meeting. She stated that the Committee addressed a number of key agenda items in a videoconference meeting on October 12th as follows:
First, NAU presented the Arizona Universities Network (AZUN) progress report. AZUN successfully supports nursing, teacher education, fire science and law enforcement programs. Phase 1 of the AZUN portal is completed. This internet portal includes all electronically delivered programs and courses offered by the Arizona University System. Then the AZUN budget for FY 2008 was approved by the Committee. The budget of $4.6 million included the allocation of $50,000 to help fund the State’s Arizona Broadband Connection Initiative that is designed to support development of Broadband communications connectivity throughout rural Arizona. The universities’ IT Annual Reports and Implementation Plans were presented to the Committee. All three universities showed an increased percentage of the IT expenditures in central computing operations. Over $229 million dollars was invested in IT related operations in FY 2007. The university CITOs presented plans for three collaborative initiatives, including IT Security; IT Supercomputer sharing; and IT Methodologies projects. As you may recall, these collaborative initiatives were identified in the recent Moran Consulting Report. Finally, based upon a study by the Burton (consulting) Group, the Committee allocated $42,000 from the IT Innovation Fund to the universities to begin the establishment of the Arizona Tri-University Identity Federation. This will allow single sign-on for faculty, staff and students across the university system and eventually with Federal projects avoiding multiple sign-on names and passwords to access the various systems.

AUDIT COMMITTEE (Chair: Regent Mariucci)

Regent Mariucci chaired this portion of the meeting.

Report from the Audit Committee (Board Item #29)

Regent Mariucci gave a report on the November 1, 2007, Audit Committee meeting. She stated it was very important that the auditors at the university and central office develop a competency in construction auditing, particularly work-in-progress construction auditing. To date, ten auditors have attended classroom training at ASU and five have participated in a construction contract audit of an ASU project under the direction of Jefferson Wells, a consulting firm. An ongoing topic of strategic discussion is whether construction auditing should be done in-house.

She stated that the committee undertook a review of the procedures in place to ensure that program fees are actually applied appropriately. The audit status reports for each of the universities were reviewed. Regent Mariucci stated that the Committee had questions about productivity and costs of audits. The Committee will use this opportunity to look at what is being audited and why.

She stated that the next Audit Committee meeting will be January 24.

The meeting recessed at 4:50 p.m. and reconvened at 9:45 a.m., Friday, December 7, 2007.

Regent Boice welcomed everyone to the Friday morning portion of the Board meeting.

REPORT FROM THE PRESIDENT OF ARIZONA STATE UNIVERSITY

President Crow introduced Johnnie Ray, who is the President of the Arizona State University Foundation. He came to the foundation from Emery University where he was the Senior Vice President for Development. He has proven to be an important addition to the university’s leadership.

Johnnie Ray stated that he is a “public school kind of guy.” He stated that he believed the real action and the real impact on American society is through the public universities. In observing the evolution of the public universities, over the last several years, he has felt some concern. The level of state support for the public universities has declined. The universities have had to look for ways to mitigate the loss of that revenue stream. Many universities have turned inward, they have circled the wagons, they have raised admission standards, but in doing so they are keeping out hundreds of highly qualified students. He believes that if the economy is to remain robust and the workforce is going to remain robust the universities need to have seats in quality places for students that are coming from backgrounds that are not privileged.

He stated that he believed that, as a university of the first order, ASU has an imperative to serve the supporting society. Through the vision The New American University the special franchise of ASU is that service is the very foundation upon which teaching and research reside, and the university's enduring connection with its constituents is to use its intellectual assets to connect very directly with the economy, culture and general quality of life of the Valley, Arizona, the nation and the world. The New American University is not just a concept, it is a mandate, publicly stated, that ASU is going to change the very nature of the way higher education is practiced in this century. The purpose of the Arizona State University Foundation is quite simply to support the implementation of the New American University. This will be done by drawing the broad public and constituencies of ASU into this powerful new vision through the devotion of time, advocacy, volunteerism, philanthropy and numerous other ways. The foundation is meant to be the "front porch" for ASU for the individuals, corporations and foundations who believe in what we are trying to achieve here and investing in ways most suitable to them.

STRATEGIC PLANNING, BUDGET AND FINANCE COMMITTEE (Chair: Regent Bulla)

Regent Bulla chaired this portion of the meeting.

Development of the 2020 Strategic Plan for the Arizona University System (Board Item #30 - Att. 1 - Att. 2)

Sandy Woodley and Dan Anderson joined the meeting for this presentation.

Regent Bulla stated that the Strategic Planning, Budget and Finance Committee has been hard at work over the past several months putting together a draft framework for the system wide planning efforts. Yesterday there was a presentation in the Decision Theater and it was very impressive to imagine the technological capabilities that will allow this board to make evidenced based decisions as we plot our course from now to the year 2020.

Regent Bulla stated that he believed there would be lots more information available at the January meeting. There are many complicated policy decisions that will need to be made in the coming months. Regent Bulla further stated that he is hoping to have a more complete, if not finished, strategic plan by the September Board meeting, if not the August meeting.

Sandy Woodley then went over the draft documents showing preliminary goals and performance targets. In addition, she shared the financial projection model currently in draft form which, when complete, will allow the Board to understand the financial resources needed to be successful in the achievement of the 2020 plan. Sandy also stated that the Committee will now begin to work with the universities on the strategic planning process so that next year when we look at the five year strategic plans of the universities, we will be able to see a more direct connection to the 2020 Plan.

Regent Mariucci stated that there are certain guiding pillar-like principles that this plan is being based on and from here forward this process will get increasingly complex. One of the pillars that the committee has struggled with and then adopted is the notion of is it our responsibility to provide every desiring and qualified person in Arizona a shot at a public higher education degree in this state. If any Board member disagrees with that philosophy, they need to let the committee know now.

Regent Calderón stated that he believed that it is important that this system endeavor to provide an opportunity to first generation students in this state at almost any cost.

President Crow stated that it is his belief that this is an issue which people believe is being driven by resources. President Crow stated that he does not believe that resources are the system's principle constraint, but rather creativity is the system's principal constraint. President Crow says no one has taken the time or energy to figure out how to deliver quality education to large numbers of students, or to design differentiated institutions. People should not be overly concerned about the resource issue, because that is a constraint in all organizations, but to be focused on the creativity constraint and the adaptation constraint, because we have a better opportunity to do that.

Regent DeConcini stated that he believed that it was the Board's job to provide a college education to every qualified resident in the State of Arizona.

Universities’ 5-Year Strategic Plans (Board Item #31 - ASU - NAU - UA)

Sandy Woodley joined the meeting for this presentation.

Regent Bulla stated that the Board was being asked to review and approve the proposed Five-Year Strategic Plans for FY 2009-2013 for the universities prior to their submission to the executive and legislative branches of government.

President Crow presented a PowerPoint presentation. And he stated that ASU's vision has not changed for five years and it is to establish ASU as the model for a New American University, measured not by who we exclude, but rather by whom we include; pursuing research that benefits the public good; assuming major responsibility for the economic, social, and cultural vitality and health and well-being of the community. ASU is meeting its objectives which are access and quality for all, establishing national standing in academic quality and impact of colleges, becoming a national comprehensive university by 2012, and schools in every field, and enhancing local impact and social embeddedness.

President Haeger stated that several years ago, the Board decided that each of the three universities was going to be allowed to pursue an agenda and a mission that was distinctive to it and to which it could excel both statewide and nationally and for NAU that begins with outstanding undergraduate residential education. That is the key to the institution. The undergraduate mission is strengthened by research, graduate and professional programs, and sophisticated methods of distance delivery. NAU's five year plan strategic issues are faculty salaries; Flagstaff campus facilities; health care education; serving rural Arizona; and economic development, workforce education and research.

President Haeger stated that while each of the state universities has additional capacity on their campuses to serve students, the need for baccalaureate education in rural and other underserved areas remains acute.

President Haeger also stated that it is one of the main goals of NAU to increase the recruitment of highly qualified faculty as well as improve the retention and salaries of highly qualified faculty. NAU would like to increase full-time faculty members. He stated that contact with full-time faculty comes at a cost. It costs nearly twice as much to use a full-time faculty member in a course than to use a graduate assistant, and nearly three times as much as using part-time faculty.

Regent Calderón stated that he believed that it was very important that NAU continue to work on faculty enhancement as well as faculty salary.

President Shelton stated that the UA's strategic directions were to prepare Arizona's youth and ensure access and opportunity; engage and graduate students who can contribute to the state, nation and world; provide world-class research that improves the human condition in Arizona and beyond; and to partner with and serve the people of Arizona. He stated that some of the objectives were to certify 5% more teachers each year and establish a program called STEM Teachers for Arizona which will be used to attract more teachers to STEM teaching; establish the Arizona Assurance which will bring greater need-based financial aid to the poorer students; increase enrollment of new freshmen by at least 200 per year; improve freshman-sophomore retention and 6-year graduation rates; the UA will lead the nation in research and outreach activities that are critical to this state's future such as climate, water, environment and energy sustainability, etc.; develop the Phoenix Biomedical Campus; expand the clinical health care services throughout the state with an emphasis on rural areas through telemedicine; and enhance technology transfer to name a few.

Regent Mariucci stated that she believed that, as the universities compete for scarce resources, that one of the foundational pillars ought to be the universities’ role in impacting the transition of the state economy and how they marshal resources, and rationalize scarce resources around that as a priority as it relates to research, relevant student education and workforce development. She stated that it was not that acknowledgement was not embedded in the three presentations, but it was not a driving force and she believes that it should be a driving force for the system. Our principal should be around making our universities more relevant in a rapidly transitioning economy; we can have a leadership position in that economy; and resources can be rationalized that way and the Board can prioritize around that kind of objective.

Upon motion by Regent Bulla, seconded by Regent Calderón, the Board unanimously approved the Universities' Five-Year Strategic Plans.

UPDATE ON THE UNIVERSITY OF ARIZONA COLLEGE OF MEDICINE – PHOENIX, IN PARTNERSHIP WITH ARIZONA STATE UNIVERSITY

Regent Stuart updated the Board on the University of Arizona College of Medicine-Phoenix, in partnership with Arizona State University.

Regent Stuart stated that the 24 students have finished their first block and almost completed their second block. Interviews are being conducted for the next class of students. To date, approximately 500 students have been interviewed. The Tucson campus will accept 110 first-year students in 2008 and the Phoenix campus will expand to 48 first-year students, for a total of 158 first-year medical students at the two campuses.

Regent Stuart then reported that Kendall Allred, a third-year student based in Phoenix, was just elected a student member of the Board of Trustees of the American Medical Association. This is a very prestigious position. Only one student in the country holds this powerful seat. Our congratulations to Kendall.

The College of Medicine's Commitment to Underserved People Program has expanded to Phoenix, and students are now helping and providing medical services at the Wesley Community Center in downtown Phoenix.

There are now 30 faculty on board at the Phoenix campus and the College of Medicine continues to recruit more outstanding faculty.

Regent Stuart stated that the one slow spot is the clinical affiliation. The College of Medicine continues to discuss the MOU that is in place.

CAPITAL COMMITTEE (Chair: Regent Calderón)

Regent Calderón chaired this portion of the meeting.

Approval of FY 2008 Capital Development Plan Amendment for Two Projects: Memorial Union Fire Renovations and Indoor Football Practice Facility (ASU) (Board Item #32)

Carol Campbell and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that Arizona State University was requesting approval of an amendment to its FY 2008 Capital Development Plan Amendment to incorporate the Memorial Union Fire Renovations and the Indoor Football Practice Facility projects. This item was reviewed at the November 29th Special Capital Committee Meeting.

Regent Calderón stated that the Capital Committee recommended Board approval provided that ASU not finance the football facility with bonds, and instead use other funds to advance construction funding and repay those fund sources when the pledged gifts for the football facility are collected.

Carol Campbell stated that ASU had agreed to make the changes as requested by the Capital Committee.

Regent DeConcini asked who estimated the value of the damage to the Memorial Union. Carol Campbell stated that the estimate of the damages was done by the restoration company and the estimate for the additional changes was done by ASU staff.

Regent Boice stated that he was very concerned about the football practice facility. He stated that he wasn't sure that he wanted to go down this road. He stated that he is afraid that as soon as this project is approved the other universities will want to do something similar to be competitive. He then stated that as hard as money is to come by it is difficult to believe that this facility is at the top of the donor dollar priority list.

Regent Mariucci stated that tactically she believed that the value of alternative uses of these facilities is increased and the demand is evident. Strategically the Board should look at the status of athletic facilities across the system in a strategic, thoughtful way relative to size, scope, age, deferred maintenance, opportunity, revenue production, alternative use and most importantly long term capital finance structures for athletic facilities and to do it in a consolidated, holistic and thoughtful way.

Upon motion by Regent Calderón, seconded by Regent Mariucci, the Board approved the ASU FY 2008 Capital Development Plan Amendment as presented in the Executive Summary, with the revised financing conditions for the Indoor Football Practice Facility, with Regent Boice voting no.

Combined Project Implementation Approval and Project Approval for Indoor Football Practice Facility (ASU) (Board Item #33)

Carol Campbell and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that Arizona State University was requesting Combined Project Implementation Approval and Project Approval for a new $8.4 million Indoor Football Practice Facility. This item was reviewed by the Capital Committee at its November 15, 2007, meeting and was recommended for Board approval. As noted earlier, when the Capital Committee reviewed the addition of this project to the Capital Development Plan at its November 29 special meeting, the financing conditions were changed.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board approved the combined Project Implementation Approval and Project Approval for the Indoor Football Practice Facility as presented in the Executive Summary, and with the revised financing conditions, with Regent Boice voting no.

Approval of Sale of Approximately 25.1 Acres of Vacant Land at the Polytechnic Campus to Horizon Higley Development, LLC, for Use by University Public Schools Initiative (UPSI), and Waivers of Board Policies Requiring Public Auction and Inclusion of a Legal Description of the Property in the Submitted Summary Materials (ASU) (Board Item #34)

Carol Campbell and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that Arizona State University was requesting approval of the sale of vacant land at the Polytechnic campus to Horizon Higley Development, LLC (HHD LLC) for use by University Public Schools Initiative, and a waiver of the requirements in ABOR Policy 70-204.A for an auction of the sale property and including of the legal description of the sale property. This item was reviewed by the Capital Committee at its November 15, 2007, meeting and is recommended for Board approval.

Carol Campbell stated that this is an ASU initiative formed to work with local school districts and communities in order to create research based Pre-K-12 schools. The education plan includes the formation of a campus located at the ASU Polytechnic campus. It is expected that the creation of the school w2ill provide the following benefits to ASU: Enhanced opportunities for research within the classroom environment; opportunities to develop and implement curriculum and internship and student teaching opportunities for students.

Regent Mariucci stated that she was concerned that the option to purchase additional acreage did not specify any terms. Regent Mariucci stated that it should be stated that the terms for the option to purchase additional acreage be the same as for the first 11.7 acres at $6.50/foot.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved the sale of land at the ASU Polytechnic campus to Higley Development, LLC, including waivers to Board policies requiring public auction, and inclusion of a legal description as stated in the Executive Summary and that the terms for the option to purchase additional acreage, as described in the Executive Summary, be for a price no less than $6.50/foot.

Combined Project Implementation Approval and Project Approval for Memorial Union Fire Renovation (ASU) (Board Item #40)

Carol Campbell and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that Arizona State University was requesting combined Project Implementation Approval and Project Approval to proceed with renovations of the Memorial Union. ASU anticipates receiving a risk management insurance reimbursement of $27 million to repair fire and water damage in the building. ASU is requesting approval of a total project budget to $40 million to enable additional renovations. The Capital Committee reviewed this item at its November 29, 2007, special meeting and recommended Board approval.

Regent Boice asked if this would get the union into a position where further renovation would not be needed for some time. President Crow responded that this repair will extend the life of this facility, but it does not eliminate the need for future expansion.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved combined Project Implementation Approval and Project Approval for the Memorial Union Fire Renovation project as presented in the Executive Summary.

REPORT FROM THE JOINT CONFERENCE COMMITTEE (JCC) OF THE UNIVERSITIES AND COMMUNITY COLLEGES

President Haeger acknowledged the university system representatives to the JCC for this academic year: Regent Palacios, Regent Duval, Regent Venezia, and Joel Sideman. He stated that the first meeting was held in mid-Oct.

The key agenda item was a report on the P-20 Feasibility Study conducted by the National Center for Higher Education Management Systems (NCHEMS). Darcy Renfro from the governor’s staff and Erin Hart from the governor’s office, made the presentation. Darcy pointed out that many of the options for increasing access to higher education that were included in the NCHEMS Report are very similar to the six recommendations that the JCC developed in 2006. As a result, it is expected that there will be increased interest in the JCC's progress in implementing their recommendations during this next year.

Possible initiatives for this year were discussed. One that is of interest is to develop a statewide common course numbering system. Supporters of such a system believe it would simplify transfer. This would be a significant endeavor by all of the institutions involved and given other technical resources the JCC will research this possible initiative to determine whether it would benefit Arizona.

The JCC will be looking at how they might develop a joint recruiting effort focused on reentry students. It is believed there are a large number of students who have completed the statewide general education curriculum but are not enrolled at either a community college or university. The Hezel study on transfer articulation that was conducted last year found that students who complete this curriculum before entering a university do better than other transfer students, so this may be a benefit to jointly recruiting them.

REPORT FROM THE ARIZONA FACULTIES COUNCIL

Dr. Watson reported that the Climate Change Conference was very successful. He stated that he had attended one of the Solutions presentations and it was a very good presentation and message. The AFC believes that the faculty could assist in delivering this message around Arizona. The AFC wanted to bring some issues regarding retirement and health to the Board. One of the issues is Optional Retirement Plan people do not have the same healthcare subsidy. Another involves Retirement Plan election change. The AFC was also interested in learning about how the retirement plans could be changed so that a faculty member would not have to choose a plan right away or allow a one time change. The AFC is also discussing the possibility of developing a VEBA plan for faculty members.

With respect to the strategic plan, the faculty was and is supportive of the changing directions initiative that established differentiated missions for the universities and continues to strongly support that mission. One model does not necessarily fit all.

INQUIRIES, REQUESTS, REPORTS, AND COMMENTS FROM REGENTS AND MEMBERS OF THE COUNCIL OF PRESIDENTS

The Regents thanked Arizona State University, President Crow, and all of the staff for their hospitality and for making this meeting (even with all of the challenges) another well-run meeting.

ADJOURNMENT

The meeting adjourned at 12:15 p.m.

SUBMITTED BY:

Margaret L. Martin
Secretary to the Board

APPROVED BY:

Fred T. Boice
President

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