June 2000 Minutes/Arizona Board of Regents

A meeting of the Arizona Board of Regents was held June 30, 2000, in the Havasupai Room of the University Union at Northern Arizona University in Flagstaff. President Amos called the meeting to order at 9:05 a.m.

PRESENT:	Regent George H. Amos, III Regent Judy Gignac Regent Chris Herstam Regent Jack Jewett Regent Kay McKay Regent Christina Palacios Regent Gary Stuart Regent Christine Thompson Regent Donald Ulrich
ABSENT:	Governor Jane Dee Hull Superintendent of Public Instruction Lisa Graham Keegan

Also present were: President Clara Lovett, Dr. John Haeger, Dr. Jeanette Baker, Dr. Michael Mullen and Ms. Anne Barton,, Northern Arizona University; President Peter Likins, Mr. Joel Valdez, Dr. Randy Groth, Dr. Elizabeth Ervin, Mr. Dick Roberts, Ms. Judith Leonard, Dr. George Davis, Dr. Patti Ota, and Mr. Greg Fahey, University of Arizona; President Lattie Coor, Dr. Milton Glick, Dr. Mernoy Harrison, Dr. Christine Wilkinson, Dr. Elaine Maimon, Mr. Allan Price, and Mr. Steve Miller, Arizona State University; Executive Director Linda Blessing, Secretary to the Board Judy Garza, Board Counsel Joel Sideman, Dr. Thomas Wickenden, Ms. Louise Houseworth, Mr. Tony Seese-Bieda, Dr. Art Ashton, and Ms. Norma Salas, Central Office; Dr. Jerry Hogle, Arizona Faculties Council Representative; and Student Regent Designee Mary Echeverria.

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the June 30, 2000, Documents File.

Jim Bishop, President of a financial services firm in Tucson that represents employees of the University of Arizona with brokerage accounts, 403B accounts, and the Board of Regents' Optional Retirement Plan (ORP). He asked the Regents to reconsider the recommendation in Item 14, Approval of Carriers for ORP, that would eliminate Aetna from the approved list for new ORP participants, but would allow Aetna to service and receive contributions to existing contracts. He understands Aetna is not the cheapest, but he believes Aetna may be giving a higher level of service than people received when they make their own decisions directly. He also understands Aetna does not have as good a Web site as those who sell their products directly to the customer, but believes Aetna's site is good.

Paul Peterson, the new Executive Director of the Arizona Students' Association, introduced himself and said he was looking forward to working with the Regents during the upcoming year.

Benjamin Graff, new Student Body President for the University of Arizona, introduced the new and returning officers of ASUA. He said he was looking forward to working with the Regents on common goals during the upcoming year.

Shaun Alex Bainbridge, new Student Body President for Arizona State University, introduced the officers of ASASU. He also said he was looking forward to the upcoming year.

Sara Presler, new Student Body President for Northern Arizona University, said she was looking forward to a great upcoming year and introduced the officers for ASNAU.

President Lovett introduced Dr. Art Ashton of the Central Office, Ms. Betty Craft from ASU, Mr. Fred Hurst from NAU, and Ms. Sally Jackson from UA who joined the meeting for this discussion. She said these people had been the leaders of an academic and technical group numbering almost thirty people from all of the campuses who were responsible for putting together the effort that was being launched today, a common web portal for all the courses and programs offered by the Arizona university system. This is the first step in a long-term effort to collaborate among the ABOR universities to produce an on-line part of the system. The staff was assisted by donations of technical assistance, as well as software, from the Oracle Corporation. Their work has resulted in expanding access to the system by students, whether they are on a traditional campus, residents of rural areas, or at a work site.

Ms. Jackson said Azdistancelearning.org is a web site that students worldwide can use to find university courses without actually being on campus. To create this site, the work group located all the courses available on web, video, or correspondence mode from each of the three universities. They then built a common data base that could be searched from the web page. Once the students locate the course they want, it can be accessed from home, business, or any other off-campus site. There are 420 individual courses listed on the site for Fall 2000 and 17 degree and certificate programs.

Ms. Jackson said the staff considered themselves lucky to have Oracle Corporation as a partner in the enterprise as they helped build a sophisticated data base with a powerful search tool. It is possible to add unlimited educational opportunities to the data base and to update it whenever it is desired. Ms. Jackson said this is the first major accomplishment within the broader collaborative project, the Arizona Regents University. The web site is the Phase 1 product. It shows the common commitment to development of technology-delivered education.

Ms. Jackson introduced Jason Robinson, an undergraduate major in visual communications at NAU, who presented a short tour of the web site, showing how a student can find a course, then access any of the universities to find out the cost and anything else about the course or registration. The student can then register on line. A question was asked concerning on-line advisement and the Regents were told it is not available yet; but there is a telephone number to call. The Regents were told there would be links at sites throughout the country in areas where students would be expected to go that would send them directly to this site.

President Likins asked about the mix of students taking these courses from on and off campus and was told it is approximately 60% on campus students and 40% off campus students at NAU. Nationally, the number is 75% on campus students and 25% off campus students.

President Amos announced Item No. 13, Preliminary Justifications for Capital Projects Required by the Capital Improvement Plan Guidelines, was removed from the Consent Agenda to be discussed under the Resources Committee Agenda. Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent matters and were adopted upon motion of Regent Gignac, seconded by Regent McKay. There was no individual discussion of these items.

The Board approved the April 6 and 7, 2000, and the May 19, 2000, Executive Session minutes and the May 19, 2000, Regular Meeting minutes.

The Board authorized the University of Arizona to enter into a contract with the Arizona Department of Health Services to support the Arizona Poison Control Center for FY 2000-2001. The proposed amount is $1,050,000 for the period July 1, 2000, through June 30, 2001.

The Board authorized the University of Arizona to enter into a contract with the SPAWAR Systems Center to support a globally distributed collaboration and knowledge management system for the warfighter. The amount of the contract is $2,116,764 for the first year of the project. The period of the contract is July 15, 2000, through July 15, 2005, and the total contract amount is $9,967,456.

The Board received information on the Honors Endorsement Program which was mandated by the legislature in 1997. An Honors Endorsement Program Committee, consisting of representatives from the universities, the Regents, the State Board of Education, and the Department of Education has been meeting since 1998. The committee has developed multiple criteria for awarding an Honors Endorsement and has proposed a procedure for implementation in 2002. These components of the program have been reviewed by joint meetings of representatives of the Arizona Board of Regents and the State Board of Education.

A survey of high school counselors was conducted early in 2000, introducing the Honors Endorsement and requesting input about operational issues in implementing the program. The survey revealed some resistance on the part of high school counselors to the workload involved in implementing the Honors Endorsement and a feeling that, without some financial reward tied to the endorsement, students would not be interested. To explore counselor concerns, a pilot test of the program will be implemented at selected high schools in Fall 2000-Spring 2001.

The Board Central Office and the universities have been asked to provide funds to support the final years of the project leading up to implementation in 2002. The State Board of Education/Department of Education will also be asked for financial support to further develop the program. The legislature did not appropriate funds to develop, implement, or sustain the program. Participation in the final program to be implemented in 2002 is voluntary.

The Board approved the data elements and implementation plan for the newly created inventory of centers and institutes. The data elements include Center/Institute Name, University Affiliation, College/Department Affiliation, URL, Substantive Area, Purpose/Classification, Initial Date of Approval, Funding source, Sunset Date, Previous Review Date, Mission Statement, Courses, and Address. The inventory includes 97 centers and 24 institutes throughout the Arizona University System. The Inventory will be made available on the ABOR web site during Fall 2000. The Inventory will be updated with information for new centers and institutes as approved by the Board or when they are disestablished through the appropriate processes. The universities will provide updates regarding any substantive changes to the data elements for each center and institute as they occur.

All centers or institutes that meet the definition as provided in ABOR Policy 2-302 are included. Several centers pre-date the initial approval required under the policy. These centers are included and so noted in the inventory. Other centers have been established by the authority of the legislature or the governor. These are also included. The inventory will be maintained by the Central Office staff.

Ms. Louise Houseworth, Ms. Gale Tebeau, Mr. Dick Roberts, and Mr. Josh Allen joined the meeting for this discussion. Ms. Houseworth explained that the state expenditure authority included state general funds appropriated by the legislature, tuition, and other miscellaneous revenues supporting the state operating budget. The preliminary FY2001 total Arizona university system state expenditure authority of $1B includes $773.5M in general fund appropriations, and $227.2M in state collections, which represents a 3% increase over FY 2000.

Upon motion of Regent McKay, seconded by Regent Thompson, the Board approved the FY 2001 state expenditure authorities for the Arizona university system and authorized the universities in September to request permanent adjustments to their initial FY2001 state expenditure authorities based on the Fall 21st day student enrollment counts.

Ms. Louise Houseworth, Ms. Gale Tebeau, Mr. Dick Roberts, and Mr. Josh Allen joined the meeting for this discussion. Ms. Houseworth stated the All Funds Operating Budget combines the state operating budget and the local funds budget into a comprehensive report that includes projected revenues, expenditures, and fund balances. The initial All Funds Operating Budget reflects changes since the Spring Update presented to the Board in April and details any accounts that project a year-end deficit of $100,000 or more.

Regent Gignac asked about the $4.9M lease payment requested by ASU West and was told this is the way to move ASU West from lease purchase to a capital account. She also asked about the
UA funding gap of $3.7M in academic bond debt service supported from locally retained collections. President Likins explained the money for debt service for the Integrated Leaning Center was not funded from the general fund, but from collections. The UA hopes it will be granted general fund money in the new budget cycle for this debt service; in the meantime, the money is being taken internally from the plant fund.

Upon motion of Regent McKay, seconded by Regent Herstam, the Board approved the Initial FY2001 All Funds Operating Budget.

Ms. Louise Houseworth and Mr. Seese-Bieda joined the meeting for this discussion. Ms. Houseworth said the Board would be asked to review the preliminary FY2002-2003 biennial State Operating Budget requests in August with final Board action in September. The guidelines in the Executive Summary match the guidelines issued by the Governor's Office of Strategic Planning and Budgeting.

President Elect Ulrich asked if the Governor's Sales Tax initiative would affect the decision packages and the salary plan; and if so, how. Mr. Seese-Bieda said the ballot referendum says it is a technology and research fund that can be used for a variety of things, including new economy-type technology and research initiatives, some capital use, some distance learning opportunities, and some debt service for capital facilities at ASU East and ASU West. The question becomes, of the decision packages and the continuation items contained in the budget request, how many of those needs that are identified at that time could be addressed potentially by the sales tax referendum. Those questions still need to be answered. The bill also says initiatives that come from the Governor's Tax Force on Higher Education can be funded with the tax money.

Regent Gignac asked why UA South was not listed as one of the possibilities under the area of expanding access issues as that puts the issue under a decision package which in the past has rarely been funded. She would like to add Continued Academic Program Development at UA South on Page 4. President Likins said he had no problem with that addition; however, UA would also be incurring costs associated with the UA joint project with Pima Community College in the northwest part of Tucson. He would like to see that included as well as they are both expanding access issues. There was a discussion of whether expanding access includes capital expenditures or program expenditures as President Lovett said NAU also has lease costs involved with its co-location on community college campuses.

Regent Herstam noted there had been a discussion yesterday during the Retreat concerning the timing of the budget process this year due to the tax referendum in November as it might impact
decision packages. There may be a need to remain more flexible than normal, and the Central Staff was asked to help analyze the best way to proceed this year.

President Elect Ulrich said the Governor's Task Force on Higher Education would be bringing forth a proposal to allow free community college tuition for Arizona high school graduates He said that could affect the expansion of UA South, ASU East, and ASU West, and might affect decision packages; and he agreed with Regent Herstam that there is a need to remain flexible.

Regent Gignac said she would like the language to be changed to include UA South, the co-location with Pima Community College, if it is program related, and the comments President Lovett had made. The Regents were told of the steps along the way where the budget submittal can be revised. Upon motion of Regent Gignac, seconded by Regent McKay, the Board adopted the preliminary FY2002 and FY2003 Biennial State Operating Budget Request Guidelines as proposed, with the addition of Regent Gignac's suggestions.

Mr. Seese-Bieda reminded the Regents the tax referendum is structured so the funding comes to the Board for allocation. The money related to the operating budget request is appropriated by the legislature.

Dr. Christine Wilkinson and Dr. Mernoy Harrison were present for this discussion. Regent McKay explained ASU was requesting Revised Project Approval with a Budget Increase of $400,000 for the Residence Life Building Additions on Main Campus. Project Approval was granted by the Board in March 2000. She complimented ASU on using bid alternates to control the cost of the project. Regent Gignac asked if this project was funded completely by auxiliary funds and was told that and Residential Life reserve plant fund. Upon motion of Regent Ulrich, seconded by Regent Herstam, the Board granted Revised Project Approval and a budget increase of $400,000 to Arizona State University for the Residential Life New Building Additions on Main Campus.

Mr. Joel Valdez and Mr. David Duffy joined the meeting for this discussion. Regent McKay explained UA was requesting a budget increase from $3.1M to $3.67M for the construction of the Strategic Alternative Learning Techniques Center (SALT). This facility, which will be funded entirely through gifts, will be utilized for the instruction of students with learning disabilities.

Regent Palacios asked about the financing of the operation of this building and was told it will be self-supporting, but it is hoped an endowment will be established for operation and maintenance costs. Upon motion of Regent Ulrich, seconded by Regent Herstam, the Board granted a budget increase to the University of Arizona for the SALT Center project.

Mr. Joel Valdez and Mr. Tim Pickrell joined the meeting for this discussion. Regent McKay explained the UA was requesting authorization to sell COPs for the purpose of funding the Sixth Street Parking Garage, the Mt. Graham International Observatory Power Line Project, the prepayment of the Oracle Corporation Site License Agreement, and paying the costs of issuance of the COPs. The total amount to be financed is anticipated to be $32.9M. Debt is proposed to be retired from parking structure revenues, operating funds from the Large Binocular Telescope Corporation (LBT), and from university local funds.

Regent McKay asked about the difference in interest rate between COPs and system revenue bonds and was told interest rates on the COPs are usually a quarter to a half a percent higher than interest rates on system revenue bonds. The COPs are used primarily because the project being built with that source of funding is the collateral. The system revenue bond pledges all revenues from the university.

Mr. Valdez said the university had hoped the Mt. Graham power line would be built by private enterprise, and there was interest; but the power companies decided not to build the line; so it is necessary for the university to stand the cost and to build the line. He said Conceptual Approval should have been requested to comply with the Board's capital development process. The Board could pull the project from this financing package or could proceed with the financing authority pending review of the Conceptual Approval request in August. Regent Gignac asked what funds would pay for these COPs and was told out of the operating budget of the LBT. The university is currently hauling diesel fuel and the cost of buying the power will be the same or less. President Likins informed the Regents he had just been informed a lawsuit was filed to express objection to the construction of the power line which will complicate construction.

Upon motion of Regent Thompson, seconded by Regent Herstam, the Board authorized the University of Arizona to sell a series of Certificates of Participation in amounts to produce sufficient proceeds to finance the acquisition, construction, and improvement budgets for the Sixth Street Parking Garage and Office Building and the Mt. Graham International Observatory (MGIO) Power Line Project (currently $32,900,000), to pay costs of issuance of the COPs, to take related actions and to enter into all necessary agreements, as provided in a resolution reviewed by Board Counsel and staff.

Mr. Joel Valdez joined the meeting for this discussion. Regent McKay explained the University of Arizona was requesting Conceptual Approval and Project Approval for the renovation of the sixth floor of the Marvel Building. The project was initiated as a Building Renewal funded restoration project with an anticipated budget of $542,900. Since the project involved renovation at a cost of less than $1M, Board approval was not required. Through the design of the project, several unanticipated renovations of the laboratories were identified which have increased the projected cost to $2,062,200. The university is requesting combined Conceptual Approval and Project Approval since no further design is required and the final estimated project cost has been identified.

Upon motion of Regent Gignac, seconded by Regent Herstam, the Board granted Conceptual and Project Approval to the University of Arizona for the Marvel Building Sixth Floor Renovation project.

Mr. Hank Traeger joined the meeting for this discussion. Regent McKay told the Board members they were being asked to review and consider proposed policy revisions to the procurement procedures for design and construction services at the universities. President Ulrich asked if these policy changes brought Board policy in accordance with state law at every level and was told yes. Mr. Traeger explained to the Board the wide variety of representatives from government and various organizations that worked to put the legislation together and supported its passage. He summarized the main points of the revisions. These proposed revisions will be submitted for approval at the August 2000 meeting.

Dr. Art Ashton and Ms. Louise Houseworth joined the meeting for this discussion. Regent McKay told the Board members they were being asked to review and consider the proposed revisions to clarify class fee policies. A work group, consisting of university and Central Office personnel, had proposed the revisions based on recommendations resulting from audits conducted in FY 1998 on Special Class Fees and issues raised by this year's Tuition and Financial Aid Work Group. Regent Thompson thanked everyone for their work on the this issue. The proposed revisions will be submitted for Board approval at the August 2000 meeting.

Ms. Gale Tebeau, Mr. Josh Allen, and Mr. Allan Price joined the meeting for this discussion. Regent McKay told the Board members they were being asked to review and consider the
proposed changes that address legislation requiring the Universities Land Fund be used solely for the Eminent Scholars matching grant fund program. The Program was established to strengthen the ability of the universities to attract private donations for eminent faculty positions. The report summarizes funds distributed to the Eminent Scholars Program from the Universities Land Fund, endowments received from external donors, interest earned on the endowments, and programs that benefit from the fund.

President Ulrich asked for comments by the presidents. President Coor said the concept itself is powerful. It is modest, at least by the standards of at least another dozen or two dozen states in the nation, some of which actually match the endowment dollars; but he believes the provision of this incentive allows the universities to compete for the very best faculty. President Ulrich asked about the allocation of the land fund and Mr. Price said the language in the legislation is consistent with what the universities had expressed about the allocation and what has been done in the past.

President Lovett strongly concurred with President Coor. She said she believed the state should be encouraged to use more of these devices as this is on a very small scale. President Likins said everyone likes to see their contribution matched by someone else; and this works on both sides, as private donors are happy to see the state match their funds and the state should be happy to see private donors match its money.

Regent Stuart asked if this money was equally available to enhance the ability to keep existing faculty as well as to attract new faculty and was told yes. Regent Stuart said it seemed to him this might be one tool in stopping the "brain drain." President Likins said the program required the matching funds to be used to match the proceeds of endowments, but the universities do use endowed chairs to hold distinguished faculty. Mr. Price said there was an agreement with the legislature the money would be used to match $1M endowments for faculty. However, the university system might want to work with the State Land Department to develop some of the parcels. For example, one of the university parcels is at the entrance to the Princess Hotel property. If that was developed, those funds would flow into this fund.

Regent McKay explained that the current employment contracts for each member of the Council of Presidents expire on June 30. The Board has begun the process of conducting performance assessments of the university presidents and the Executive Director and desires to extend their employment contracts under the same terms and conditions currently in place while the assessment process moves forward. It is anticipated the Board may adjust the compensation packages at the conclusion of the assessment process, retroactive to July 1, 2000.

Upon motion of Regent McKay, seconded by Regent Thompson, the Board authorized the extension of the multiple-year employment contracts for President Coor, President Lovett, and President Likins for the period from July 1, 2000, through June 30, 2001, under the current terms and conditions, and authorized the renewal of Executive Director Blessing's administrative appointment for the period from July 1, 2000, through June 30, 2001, under the current terms and conditions.

Mr. Dave Harris, Dr. Mernoy Harrison, Dr. Mike Mullen, and Mr. David Duffy joined the meeting for this discussion. Regent McKay told the Regents they were being asked to review and take action on the universities' preliminary justifications for capital projects requested to be included in the biennial plan for FY2002-FY2003 Capital Improvement Plans. Mr. Harris reminded the Board the universities were required to bring a project to the Board for review before it appears in the first two years of the Capital Improvement Plans (CIP). This is normally done through Project Initiation. Should this item be approved, it merely allows the three universities to request these items in their CIPs.

Regent Gignac asked if the universities could have these projects ready to be built, go out for bid, etc., in the time frame suggested by their appearance in the first two years of the CIP. Mr. Harris said he believed some of the projects would be reduced in scope by the time they were placed in the CIP. Dr. Harrison responded ASU did intend to go forward with and begin construction on the Interdisciplinary Research Center for Engineering and Sciences within that time frame. However, ASU would still need to go through the capital process, beginning with Project Initiation, to ask Board approval to proceed with the project. President Coor said this project had been in the CIP in the past and a group of corporate leaders has pledged to raise $25M over the next twelve months for this project. ASU does not yet know how it will fund the remainder of the project; it is hoped it will be with a mix of federal and other sources in addition to conventional funding.

President Likins said the six University of Arizona projects are radically different. The Parking Structure and the Facilities Services Relocation are part of the residence hall construction project for the Highland District; and new residence halls are a critical need on the UA campus. At the end of UA list is an Institute for Biomedical Research and Bio-Technology, a very ambitious plan, which is presented because the UA is looking hard for funding sources from the Federal government and private sources. If the funding is secured, the university needs to be able to proceed in a timely manner. If the funding is not secured, the projects will most likely not be constructed.

President Lovett reminded the Board NAU had used a similar approach for the proposed expansion of the clinical facilities on the campus. Mr. Duffy gave a brief overview of the projects listed in the UA request. Dr. Mullen said not all of the NAU projects would come forward, especially the major repair and renovations. This is advance notice of what is being considered.

Regent Gignac asked what the Board was being asked to approve today and was told Board approval would allow these projects to be included in the CIP. There was a discussion of the current capital policy in relation to the new system of two-year budgeting. Regent McKay asked Dr. Blessing to have staff see if changes are needed in the policy to adapt to the two-year budget cycle.

Upon motion of Regent McKay, seconded by Regent Thompson, the Board authorized the universities to include the listed projects in their FY2002-2003 Capital Improvement Plan requests to be presented to the Board for review before submittal to the legislature.

Ms. Mary Adelman and Dr. Mason Gerety, members of the tri-university committee who worked with the consultant to review proposals and make recommendations to the members of the Council of Presidents, joined the meeting for this discussion. Mr. Joel Sideman also joined the meeting for this discussion. Regent McKay said the Board was being requested to approve the recommendation from the university presidents and the Executive Director regarding carriers for the Board's Optional Retirement Plan (ORP). Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA/CREF), Variable Annuity Life Insurance Company (VALIC), and Fidelity Investments would be retained as ORP carriers. AETNA Financial Services will be allowed to service and receive contributions to existing contracts, but will be eliminated from the approved list for new ORP participants. The Vanguard Group will be added as a new ORP carrier.

Regent McKay asked for a response to the comments made during the Call to the Audience regarding Aetna. Ms. Adelman said the committee felt the costs of Aetna's product were very high in relation to their investment choices. President Amos asked if less sophisticated investors
would be able to receive advice from the recommended carriers and was told yes. VALIC offers very high customer service and the other carriers also offer customer service in other ways. Fidelity has a lot of Internet access help. Dr. Gerety said all the carriers selected offer good customer service and are willing to travel to the sites, as necessary, to help the investors.

Regent Ulrich suggested the Board allow Aetna to continue as a full provider, able to accept new customers, since they are being allowed to keep their current customers. Mr. Sideman said there had been a competitive process; so it would now be inappropriate for the Board to approve Aetna without having to reconsider all the bidders in the final pool. Regent Ulrich said he did not like selecting the low bidder for any RFP and he believed that was a problem for all state agencies.

Regent Herstam said he believed it had been a good bid process and he supported the recommendations submitted. He did not believe it would be appropriate to go back and change things for one bidder. Regent Stuart said he was uncomfortable with dropping Aetna if the only issue was cost because he had received letters from people who wanted to stay with that company. However, he understood the process had progressed to the point where he did not believe it could be changed at this time. In the future, he believed cost should not be a determining factor if the cost was to be paid by the employees, not the system.

Regent Jewett said he believed the tri-university committee had adhered to a reasonable process and had used a reasonable, nationally known, consultant to construct the RFP and monitor the process. He would be uncomfortable if any vendors were allowed to be considered on the basis of revised bids at this stage in the process. He said he did not see how cost could have been the only factor for eliminating Aetna. Dr. Gerety said the committee used four dimensions on which each bid was evaluated. After the preliminary evaluation, there were seven bidders left in the pool. Each of the seven was asked to come before the committee to discuss its proposal. Different bidders excelled at different pieces of the evaluative process. Aetna had done well, not at the top of the list, but had done well on the service side; but they fell so far below on the fee structure side, the committee felt their bid was not competitive.

Regent Jewett moved the adoption of the recommendations as submitted and Regent Palacios seconded the motion. Regent McKay said she appreciated the discussion as this is a serious subject. The motion passed with Regents Palacios, Jewett, Herstam, Thompson, McKay, and Gignac voting yes and Regents Ulrich, Stuart, and Amos voting no.

Dr. Art Ashton and Dr. Mernoy Harrison joined the meeting for this discussion. Regent Herstam told the Board this revised Project Initiation combines the renovation of the existing ASU Wells Fargo Arena with the multi-purpose addition to the arena (formerly known as the University Activity Center). The $9M project encompasses over 107,000 gross square feet of renovated and new space. Upon motion of Regent Thompson, seconded by Regent Jewett. the Board granted Revised Project Initiation to include the renovation of the existing Wells Fargo Arena.

Mr. Joel Valdez, Mr. David Duffy, and Dr. Art Ashton joined the meeting for this discussion. Regent Herstam told the Board this Project Initiation was being requested to construct a $17.2M, 47,120 gross square foot expansion of the Meinel (Optical Sciences Center) Building to be funded by system revenue bonds. Regent Herstam asked why the university was only asking for 28,000 Net Assignable Square Feet (NASF) at this time when the Project Initiation document indicates 72,000 NASF were needed. Mr. Valdez said there was a finite pool of dollars and there were other needs, so this was all that could be done at this time.

Upon motion of Regent Gignac, seconded by Regent Jewett, the Board grantee Project Initiation for the Meinel Optical Sciences Building Expansion project.

Mr. Valdez, Mr. David Duffy, and Dr. Art Ashton joined the meeting for this discussion. Regent Herstam told the Board this was a Project Initiation approval to issue a Request for Proposals (RFP) for the private development of an apartment complex of 150 units for family housing. The new complex would help meet some of the needs created by the closing of Christopher City in August. No cost estimate is provided at this time.

Mr. Valdez said this RFP would help the university decide what option to use and to help them find out what is available from the private sector. Whatever is decided will have to come back to the Board for final approval. Regent Gignac noted the facility would consist of approximately 150 units and asked how many family units were occupied in Christopher City during normal times. Mr. Duffy said he would need to check with Residence Life to find out that answer. A consultant conducted a survey to determine the mix of family and single residence needs by surveying the entire City of Tucson. Regent Gignac said she thought the needs being addressed were unique to the university.

Regent Gignac said the Project Type, under Preliminary Concept, says the proposed Family Housing would include amenities to support learning. She would like to have the RFP also ask for amenities to support children. She also noted the Project Description says the board will have an additional opportunity to review the project when the university comes forward for approval of partnership agreements; however, the recommendation omits this statement.

Regent Herstam moved to grant Project Initiation Approval for the Family Housing Project with the understanding the partnership agreements will come back to the Board for approval. The motion was seconded by Regent Gignac. President Likins said the university would look at the facts that characterize residents in Christopher City six months ago and report to the Board on the number of units occupied by families with children, the number of units occupied by families without children, the number of units occupied by unmarried students, and the number of units that were empty. Regent Stuart encouraged the university to consider combinations of the four solutions suggested and to move forward with as much speed as is reasonable and prudent as families are displaced during this process. The motion passed unanimously by voice vote.

Mr. Joel Valdez, Mr. David Duffy, Mr. Bob Smith, and Dr. Art Ashton joined the meeting for this discussion. Regent Herstam told the Board the University of Arizona was seeking Project Initiation and authority to proceed with design services for the proposed Sixth Street Parking and Office Building. The facility will provide 1,700 parking spaces and 15,000 gross square feet of parking-related office space. The preliminary budget is $17M, to be primarily funded using Certificates of Participation (COPs) to be retired using parking revenues. Regent Herstam asked if there was really a need for a $17M office building for only parking personnel. Mr. Valdez said the office building portion cost only $2M and would by used by the parking administration staff that is now housed in the Administrative Services Building. Regent Herstam asked how many bodies would occupy the building and was told 92 full and part-time appointed personnel and classified staff and approximately 20 student workers. Regent Herstam asked what impact this project would have on student parking fees and was told they will stay basically the same. Parking fees usually change in small increments each year.

Regent Gignac asked if this was the same project the Board had approved under Item 6, Certificates of Participation. She said, if it ever happens again, it would be helpful to tie the two projects together. Regent Ulrich said he had a problem with 15,000 sq. feet of space for an office building for parking administration as he has 110 people in 8,000 sq. feet in his own office and it is not crowded and they are all there at the same time. President Amos said he also had a problem with that large an office for that number of personnel.

Regent Ulrich suggested the university return with a diagram showing how the space will be used and how many people are expected to be present in the building at one time. Mr. Duffy said this office space is planned to accommodate growth over the next five years as new parking structures and additional shuttle service comes on line. President Amos recommended the university return with this project at the next Board meeting with more information on the office space as it appears the Regents are uncomfortable with this space. Regent Herstam asked if the sixty day wait would harm the project and was told the university would like to go ahead with the design process and come back in August for Conceptual Approval with a better description of the office space. President Likins said he believed the message had been heard. He believed there would be an attempt to reduce the space and, at the same time, accommodate the necessary functions. When the project returns to the Board, there will be a detailed explanation of why the requested space is needed.

Regent Herstam moved to approve Project Initiation with the understanding the Board would like a lot of questions answered at the next meeting. The motion was seconded by Regent Thompson. Regent Ulrich said he would like to know how the office space being vacated will be back filled. The motion passed by unanimous voice vote.

President Amos thanked Regent Thompson for her hard work and dedication as Student Regent and presented her with a glass piece as a memento of her service the past year. President Lovett, President Likins, and President Coor also presented Regent Thompson with gifts to thank her for her contributions as Student Regent.

The Arizona Students' Association (ASA) presented Regent Thompson with a gift to thank her for the time she spent working with and on behalf of students this past year. ASA also presented President Amos with a gift in recognition of his work on behalf of students. ASA presented President Elect Ulrich with a gavel for his use in the coming year.

President Elect Ulrich presented President Amos with a gift certificate from the Regents to thank him for his year of service as President of the Board. Executive Director Blessing presented President Amos with framed newspaper clippings as a remembrance of the media work he did during his year as President. Dr. Jerry Hogle thanked both Regent Thompson and President Amos for their work with the faculty and students the past year.

President Amos thanked Executive Director Blessing and her staff for all their assistance the past year. He also thanked the Regents for their cooperation and support the past year.

Dr. Hogle said the Arizona Faculties Council (AFC) unanimously supports the Governor's plan for education and wanted to particularly thank the Board, the Board's staff, the university staffs, and the government affairs representatives for their support of the initiative. He reported the AFC is unanimously opposed to the repeal of the state income tax and supports the use of a committee, rather than the legislature, to draw up the new legislative districts. The AFC would like to join with the Regents and the universities to support candidates for the legislature who are supportive of education.

Dr. Hogle thanked Regent Gignac and everyone else involved in the Arizona Town Hall for their support of education issues. He thanked the Regents and presidents who are members of the Governor's Task Force on Higher Education for their work with the other Task Force members to bring forward the needs of the universities. The AFC asked that staff and student assistants be included in any salary initiative as they are necessary for the faculty to succeed. The AFC supports the Regents' efforts to bring learner-centered education forward. To that end, the AFC is in the process of setting up a Website on learner-centered education that will allow discussion and bring the issues forward. The AFC would appreciate any suggestions for improving the site.

Regent Gignac reported the SBDCC met in Payson at the Eastern Arizona Community College Campus on June 15. The Executive Director's contract was renewed for another year and the SBDCC appointed Mr. Don-Paul Benjamin as Associate Executive Director for Educational Services. The SBDCC was asked to become a participant in the "Gear Up" program with NAU's Center for Excellence in Education. The SBDCC authorized the Executive Director to sign a lease document for office space at 2020 North Central in Phoenix, the same building in which the Regents' staff is located.

Mr. Don-Paul Benjamin, Ms. Molly Munger, Mr. Steve Marks, and Ms. Lori Goldman joined the meeting for this discussion. Regent Jewett said this discussion item covers three reports that give some sense of how the Board's increased university admission requirements, which were implemented in 1998, have impacted Arizona high school graduates: an eligibility study, an admission study, and feedback regarding the new requirements from Arizona schools, prospective students, and their parents.

Mr. Benjamin said the Board had discussed admissions in January 2000 when "The Academic Report Card of Arizona's High School Graduates" was reviewed. This report suggested that in 1998, fewer Arizona high school graduates than in previous years were in need of pre-college level math or English courses to be ready for success at the universities. However, current information confirms that Arizona high school students continue to struggle to complete sufficient math to enter the universities. Math, by itself, or in combination with lab science, was a leading reason for high school graduates being admitted with conditions, or being ineligible for university admission.

Mr. Benjamin reminded the Regents that students admission requirements had increased in units of basic competency from 11 units to 16 units. Also, beginning in 1998, the admissions grade point average (Regents' GPA) is to be calculated using only the basic competencies, rather than all courses. A Regents' GPA is one criteria for admission. Combined with the Regents' GPA and the increase of units, there was a substantial increase in admission requirements.

The results of the eligibility and admissions studies suggest the following: 1) Since the new university admission requirements were put in place, high school course-taking patterns have changed. Students are taking more math, lab science, foreign language, and fine arts. Therefore, the students are more prepared for university success. This was one goal the Board was looking for when it increased the requirements. 2) The eligibility study, which looks at all students, suggests fewer students were eligible for admission after the new requirements were in place. But the admission study, which looks only at students who are college bound, suggests the percentage of admitted students was about the same. There were differences for ethnic groups and for the locale of the high school. 3) Both studies suggest there was an increase in the percentage of those who were ineligible for admission, primarily in the eligibility study. 4) Both studies suggest the primary reason for admissions denial was low academic achievement in high school and lack of sufficient courses in math, lab science, or math and lab science combination. The new requirement of a foreign language also had an impact on admissibility and denial of admission. The fine arts requirement does not appear to have had a significant impact.

Mr. Benjamin said the bottom line on the admissions study is actual admissions for 1996 and 1998 showed very little change. The students admitted conditionally under the new requirements are virtually the same as the percentage admitted under the old requirements and the denials are not significantly different.

President Lovett asked if figures were available for eligibility to enter community colleges and was told no. However, eligibility for admission to community colleges is essentially a high school diploma. Regent Gignac asked if the eligibility study could serve the purpose of determining the number of students in the minority student pipeline and was told yes. She said the Board needed the information further refined by minority category based on the five minority areas. Mr. Benjamin said the reasons for both admissions and eligibility denial for all ethnic groups were virtually the same.

Regent Gignac asked what information had been gleaned from these reports and how the universities planned to use the information. Mr. Marks said some of the differences, such as those in gender, might be more related to ethnicity or location. The reports provide more information than was presented in the Executive Summary and the information is being compared in many different ways. In terms of access issues, and at this state in the analysis, no deficiency in access has been detected. President Likins asked if the studies would be continued and was told at least through 2002. The admission requirement change was very recent and the trends may change as time goes on.

Regent Stuart said the data was ominous to him as it leads him to believe the educational crisis may get worse. President Amos said he was uncomfortable with the recommendation concerning changing the fine arts requirement to allow students to choose from a broader category of academic electives in meeting university admission requirements, including computer science and vocational-technical courses as well as fine arts. The fine arts requirement was specifically added to give students a broader experience in the fine arts; not to broaden their experience in general. Regent Gignac agreed and suggested that recommendation be discussed at another time.

Regent Jewett said he believed he had heard agreement from Regents concerning Recommendation 1 on Page 7 of 17. The Board should continue to allow the universities to admit students conditionally and should continue to allow students up to two years to resolve admission deficiencies. This will require an amendment to Board policy.

Regent Jewett said he believed the Regents would like to see the universities move quickly to act on Recommendations 2 and 3, working with K-12 educators to further examine ways to increase the eligibility and access of students from rural high schools and of all ethnic groups, in particular, under-represented groups. The universities should also work with the K-12 sector to study ways to increase achievement in math and science. He said this would lend itself to several of the initiatives coming out of the Town Hall. Regent Gignac said there would be a Retreat of several of the members of the State Board of Education and the Board of Regents in August and she suggested this be one of the topics. Regent Jewett suggested the universities return with more specific plans in November. President Lovett and Regent Gignac said there are many initiatives already happening with math and science, some as a result of the experience with the AIMS test. President Lovett said she believed the universities could report to the Board in August what was
already underway. Regent Gignac said a listing of everything underway would be helpful in identifying any gaps in coverage that might occur in the state.

Regent Jewett said he had heard Regents say they would like to defer Recommendation 4 at this time. President Amos said he would like the recommendation to say, "The Board should consider options regarding the fine arts requirement. The universities should provide the Board with the pros and cons of keeping the policy the same, but broadening the fine arts category to include what was suggested."

Regent Jewett said a 5th Recommendation would be the Eligibility Study be updated with the year 2000 graduates so the Regents could continue to follow and monitor the trends. It would be helpful to see a plan to update the Eligibility Study at the August meeting.

Mr. Benjamin said he believed the Board should feel good about the increased requirements because the Study did show more students are attempting higher level courses. When the 1996 data is judged by the 1998 rules, there is a pattern of students challenging themselves by taking more math. There has been an increase in eligibility for students in all locales and all ethnic groups.

Ms. Kate Dillon Hogan, Dr. Milton Glick, Dr. Elizabeth Ervin, and Dr. John Haeger joined the meeting for this discussion. Regent Jewett said the Board had approved the process and outcome measures and the goals as presented in the draft UCAR report in February; but asked for an updated report for this meeting.

Ms. Hogan said this was still a partial report. Several of the measures will not be reported until the March 2001 UCAR Agenda item, as the data is now being collected in surveys sent to graduating seniors, alumni, and employers of the recent graduates. One measure for the University of Arizona does not have new data due to some organizational transitions.

Ms. Hogan reported the universities reviewed the Board's request to set a goal for the graduation rate of under-represented students. In order to streamline the report, it is recommended there not be a separate goal set for each ethnic category. The universities will continue to report on the graduation rates for each race or ethnic category and they continue to be committed to the academic support for these students to enrich and increase their graduation retention rate towards the overall goal.

Ms. Hogan said there is a recommendation to add two additional items to the March 2001 Report. This would include the eligibility information included in the previous agenda item which would include the percentage of eligible high school graduates enrolled in the public universities and the eligibility of high school graduates for university admissions.

Dr. John Haeger, Dr. Elizabeth Ervin, and Dr. David Schwalm joined the meeting for this discussion. They described the planning and implementation requests. Upon motion of Regent Jewett, seconded by Regent Gignac, the Board authorized the request by the University of Arizona for Academic Program Planning for the B.S. in Science Education with a major in science education and a M.A. with a major in social science; an Academic Program Implementation for a Bachelor of Liberal Arts; and a name change from the Department of Art to the School of Art; the request by Northern Arizona University for Academic Program Planning for a M.S. in Statistics and Academic Program Implementation for a Master of Science in Management; and the request by Arizona State University East for Academic Program Implementation of a B.S. in Multimedia Writing and Technical Communication.

Included in the Executive Summary was a summary of program and organizational changes approved by the Executive Director since June 1999.

Mr. Don-Paul Benjamin joined the meeting for this discussion. The Board reviewed a proposed policy change to implement the statute that allows non-resident teachers and teacher aides to pay resident tuition for courses required for Arizona teacher certification. These proposed revisions will be submitted for approval at the August Board meeting.

Dr. Art Farmer, Dr. Jo Ann Madonna, Dr. Deborah Sullivan, Dr. Rebecca Stout, and Dr. Veda Hunn joined the meeting for this discussion. Regent Jewett said the next two items were closely related to the one another, revisions to the Student Code of Conduct and the Student Disciplinary Procedures. He told the Regents the work product presented for review was the culmination of a year's worth of collaboration among students, student affairs representatives, and staff legal advisors.

Regent Thompson said she had a concern with the provision in 5-308A4 that forbids an expelled student from ever returning to one of the Arizona universities. For example, she believed a student who was expelled for stealing a test when they were young but changed their ways as they matured and wanted to reenter the university 20 years later should be allowed to reenter. Therefore, Regent Thompson moved to replace the proposed language for ABOR 5-308A with the language on the sheet in front of the Regents marked Agenda Item #25, DRAFT. The motion was seconded by Regent Gignac. President Lovett asked that the words Vice President for Student Affairs and Vice President for Student Services be replaced with the words the Senior Student Affairs officer as the three universities do not use the same term of office. Regent Gignac noted the new terminology should be applied throughout the document. The motion passed by voice vote.

Regent Gignac said she noticed stalking was mentioned in the document and the term was not defined. Mr. Sideman said that would be considered to see if it could be worked into the policy. The proposed revisions will be submitted for Board approval at the August Board meeting.

The Board reviewed the proposed revisions to the Student Disciplinary Procedures. The revisions clarify the discretionary authority of the Dean of Students to remove students from one or more classes, university housing, or other locations on an immediate basis when appropriate.

Language was adopted to comply with a recent Arizona Supreme Court ruling that now entitles students to full legal representation during disciplinary hearings. The standard of evidence needed in student disciplinary hearings is changed from "clear and convincing" to "more likely than not." Revised time lines were added regarding student appeals associated with suspensions and expulsions to both provide a more realistic set of time lines and to better comply with the Administrative Procedures Act. Students will not be allowed to graduate until the completion of appeal hearings associated with sanctions of suspension and expulsion. The role of the University Hearing Board has been changed. Language has been added to clarify that witnesses may be excluded from hearings, except during testimony, with the exception of the complainant who is alleged to be the injured party. the proposed revisions will be submitted for Board approval at the August Board meeting.

Mr. Tony Seese-Bieda joined the meeting for this discussion. Mr. Seese-Bieda summarized the Governor's Sales Tax Proposal, Arizona 2000, which was passed by the legislature and will now
go forward to a vote of the people on the November ballot. The estimates of the amount the sales tax will produce, based on current projections, would be about $45M the first year. President Coor stated he believed this was the single most significant public policy step in the decade he has been part of higher education in Arizona, and he wanted to commend the Governor for taking this step and working to get it on the ballot. President Amos also thanked the Governor for her courage on this issue.

Upon motion of Regent Gignac, seconded by Regent McKay, the Board adopted the following schedule for FY 2001-2002: August 9 and 10, 2001 - NAU; September 25 and 26, 2001 - ASU; November 29 and 30, 2001 - UA; January 31 and February 1, 2002 - ASU; March 21 and 22, 2002 - NAU Yuma; April 25 and 26, 2002 - NAU; and June 20 and 21, 2002 - UA.

Regent Designee Echeverria thanked Regent Thompson for her guidance and help in preparing for her coming year as Student Regent. Regent Thompson praised Regent Designee Echeverria for the work she had done to prepare for her term as Student Regent and thanked the Board and Central Office staff for their help during the past year. President Likins said he believes there is a new support for education in the State of Arizona and he thanked the Regents for their help in bringing this about. Regent Palacios seconded President Likins' remarks and Regent McKay agreed this is a great time to be a Regent.

Executive Director Blessing informed the Regents Mr. Don-Paul Benjamin had left the ABOR staff to work on the staff of the State Board of Directors for Community Colleges. She also said Mr. Tony Seese-Bieda was leaving the ABOR staff to work for county government in Eugene, Oregon. Regent Gignac agreed this is a great time in education and she thanked President Amos for his service as Board President the past year. Regent Herstam said he had enjoyed working with Regent Thompson the past year and thanked President Amos for a great year. Dr. Hogle commended Regent Thompson for her work the past year and thanked President Amos for his service. He also thanked Mr. Seese-Bieda, on behalf of the Arizona Faculties Council, for his work with the legislature. President Lovett thanked her staff for their help in setting up the meeting: Ms. Patty VandenHeuvel, Dr. Jeanette Baker, and Ms. Anne Barton.

President Amos expressed his appreciation for Regent Thompson and said thank you to everyone for the gifts.

MINUTES

ARIZONA BOARD OF REGENTS

MINUTES OF A MEETING

June 30, 2000

TABLE OF CONTENTS

MINUTES OF A MEETING

June 30, 2000