BOR Minutes: January 16-17, 2003

APPROVAL OF MINUTES

      Regent Thompson MOVED for APPROVAL of the Minutes of the November 21-22, 2002 Regular Meeting in Missoula, MT, the December 13, 2002 Special Meeting in Helena, MT, and the January 9, 2003 Special Meeting in Helena, MT as circulated

     The Minutes were APPROVED unanimously.

  Regent Roehm reported that Governor Martz had appointed Ms. Lila Taylor as the new Regent to replace Margie Thompson as she leaves the Board on February 1, 2003.  He noted this was also the last meeting for Commissioner Crofts, with the Interim Commissioner Carrol Krause taking over at the end of January, 2003.

  Open Forum for Public Input on MONTANA UNIVERSITY SYSTEM ISSUES

There was no public comment

CONSENT AGENDA

Staff Items:

ITEM 118-2700-R0103 - Staff; Montana State University-Billings

   Regent Hamilton MOVED for APPROVAL of all Staff Items  

Motion APPROVED UNANIMOUSLY on 7-0 vote.

Administrative/Budget Items:

a.

   Regent Jasmin MOVED for APPROVAL of Items a., b. and c.

Motion APPROVED UNANIMOUSLY on 7-0 vote.

Labor Agreements/Other:

a.

b.

  Regent Hamilton MOVED for APPROVAL of Items a. and b. 

Motion APPROVED UNANIMOUSLY on 7-0 vote.

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ACADEMIC/STUDENT AFFAIRS ITEMS

a.

b.

Commissioner Crofts explained that three years ago, Carnegie made significant changes in the classifications used to develop comparable institutions.  They are used extensively and are the most commonly accepted measure of how post secondary institutions are classified in the country.  They are also used in both the allocation model and salary comparisons.  He asked if the Board would take a position or develop a policy on these classifications.  Regent Mercer asked if any campus was considering a change based on the new categories and what the fiscal implications might be.  The Commissioner indicated he was aware only of UM-Missoula aspiring to move from Doctoral Research Intensive to Doctoral Research Extensive.  There would be an impact on the allocation model because the mix of comparable institutions would change significantly.  The group includes very large graduate research institutions.  It would not create any sort of budget shortfall.  However, to move from the second level to the top level would require significant financial changes on campus.  He noted that both campuses are great in research funding, but the difficulty in getting to the second level is the required number of Ph.D student graduates.  He noted that his suggested recommendation was in the last paragraph of his memo, which would be to take a position or develop a policy that says aspirations to change would need to be approved by the Board of Regents, with an outline of required information.  This would need to be done quickly since UM is now making financial commitments to move in that direction.  President Dennison  briefly explained the changes in the Carnegie classifications from four to two. 

  Regent Hamilton MOVED to DRAFT a POLICY statement 

President Dennison indicated he thought the mechanism was already in place with the periodic review of mission statements.  That is where anticipated programs are shown.  Regent Semmens noted that if this is the stated goal of a campus it will be allocating more resources toward the doctoral programs, and he worried it may affect the BS and two-year programs.  Regent Hamilton indicated the goal is best determined by the campus, but to proceed without guidelines is difficult.  There have been presentations in the past, the mission statements are reviewed every three years, but the board turns over every 7 years, and the campus turnover is still different.  The campuses do a great job of strategic planning.  These changes affect the student population on campus and everyone needs to understand what the changes will be.  A policy should state what kind of information the Board wants and  pull it together into one presentation.  It could be in the mission statements but that should be made clear to everyone.

  Regent Hamilton restated her MOTION to DRAFT a POLICY statement regarding changes in Carnegie Classification 

Regent Mercer suggested that when the campus budget is brought to the Board before being implemented, there should be some discussion of anything that would affect the allocation model, and that might have fiscal implications due to classifications.  

 Motion APPROVED UNANIMOUSLY on 7-0 vote.   

Regent Hamilton MOVED for APPROVAL of Item d. 

Regent Jasmin asked if Policy 220 is still worth anything.  He believes that in this case Carroll is offering a business degree and about everything this community needs.  Regent Thompson indicated it was her understanding that this particular request deals with students that can't go to school at hours Carroll offers their classes, and there is also the expense side.  Policy 220 is important, but before it went into effect, there was no discussion with the private colleges.  It is important to hear the pros and cons from all sides, and then do what is best for the student.  Deputy Commissioner Scott indicated that Policy 220 was followed step by step all the way in this proposal.  She passed the information on and met with people from Carroll College to discuss the program.  They were notified of the meeting in Missoula and did not wish to further participate.  President Trudnowsky indicated that his letter expressed all they cared to say and he didn't care to come and testify before the Board.  All of those documents are included in the materials provided.  As far as the content of the program being offered in comparison to what is available at Carroll, this degree requires they come into the program with an AAS.  Deputy Commissioner Scott noted that the articulation agreement in the materials was created in 1998 and has never been used by students.  Susan Patton, Vice Chancellor of Academic Affairs at Montana Tech indicated the program serves working people and single parents where time and dollars are important.  The classes are predominantly at night.  The program is also more of a basic business program which adds the technical components to the AAS.

 Motion APPROVED on 5-2 vote with Regents Hur and Mercer dissenting.

ADMINISTRATIVE/BUDGET ITEMS

ITEM 117-1002-R1102 - Grant of Easements to the U.S. Forest Service to Obtain Access to Tract of Land (Tract B of COS#5035) and Development of a Public Trail and Administrative Vehicle Access to Same Property; The University of Montana-Missoula  Attachments (Action Item)

Regent Jasmin MOVED for APPROVAL of Item a. 

President Dennison briefly explained that this item will expand the existing easement but will not affect the golf course.  The Forest Service will maintain the access which will be available for use by UM.  The completed agreement will be brought back to the Board for approval.

 Motion APPROVED UNANIMOUSLY on 7-0 vote

  Regent Jasmin MOVED for APPROVAL to move Item a. to ACTION today.

 Motion APPROVED UNANIMOUSLY on 7-0 vote         

  Regent Jasmin MOVED for APPROVAL of Item a. as ACTION item.

President Dennison indicated that following a lot of discussion and extensive legal analysis, the determination by the Land Board was there is no transfer of title, no alienation of property, and it remains the property of the state of Montana.  Under earlier arrangements the State Historical Society was administratively responsible for the Mansion.  At the last meeting there was concern about what would happen if the Trust could no longer manage the property.  Article V has been inserted into the agreement indicating that UM has the right, with the approval of the Board, to revert the entire thing to the State Historical Society, and they have agreed it is a good provision.  The other concern was the financial stability of the Trust since they had done many upgrades and reroofing by securing grants and not by using general funds.  Jeannette McKee of the Trust handed out documents showing the financial standing of the Trust.  Although they are not open during the winter months, they have $52,000 in their general fund, and other money will be added to it.  The expenses are about $6500 a month during the winter.  There are three full time staff, and a good Board of Directors with the ability to raise money.  All fund raising is their responsibility.  The annual budget is $160,000 for advertising and special events.  Ms. McKee sees an opportunity for the School of Forestry to visit the grounds to see the variety of trees that were planted, and for the School of Drama to participate in tours and exhibitions.  She noted by that 2007 there will be four lanes all the way down from Missoula.  She admitted there is a lot of deterioration to the buildings, but they have already accomplished a lot of work on it, and although a lot of the furnishings were sold, a lot are still there.  The original dining room and living room furniture is still there.  They have been working with Max Baucus over the past 18 months to get a federal grant of $3,000,000 to restore the house.  They anticipate a cultural arts center on the property through an endowment campaign with a variety of exhibits and uses.  Ms. McKee indicated that in the lease the Trust will form a relationship with the UM Foundation to possibly share a fundraiser half and half, but that they will not step on each others toes.  It was agreed that all language in the document referring to UM ownership of the property will be removed.  

There was discussion about the responsibilities of the university in this venture, and whether they could be afforded in this bleak economic environment.  But it was pointed out, that any MUS outreach or developing partnerships to help solve problems will have these same requirements.  Regent Thompson believed a mixed message was being sent to both staff and the people of the state and the Board needs to be clear in their management roll.  If they want to have a business plan every time a campus gets involved in outreach, it needs to be made clear up front.   It must be consistent for everything, such as the Leadership College.

Chief Legal Counsel Schramm noted that in Section XIII it is indicated that general liability insurance is the responsibility of the Trust.  Property insurance and tenants insurance for items owned by UM would be their responsibility.  A letter from Tommy Butler indicated the Daly Mansion and its outbuildings are insured through DOA.

 The item was deferred to Friday to verify there would be no out of pocket expenses for UM.       

c.

  Regent Jasmin MOVED for APPROVAL of Item c. 

President Dennison briefly explained the expansion of the project and that it will be covered by federal research funds.  The temporary laboratories will be relocated to the biological station.

 Motion APPROVED UNANIMOUSLY on 7-0 vote         

d.

  Regent Jasmin MOVED for APPROVAL of Item d. 

President Dennison explained that this proposal originated because of the ability to sell tickets.  The stadium was last expanded in 1975 with 7500 more seats.  This expansion will add 4000 seats.  He presented financial statements showing revenues from the current sale of season tickets.  UM will secure a loan for 50% of the cost, presale of new seats will go toward cost, and the balance of the project is $1.1 million which will come from the donor.  The Contractor will front the work with no interest, and he wants to be reimbursed over 3 or 4 years.  Additionally, the construction will be at cost.  The loan will be repaid from Athletics, and no general funds will be committed.  With the additional seats available, he believes they can pay the loan off by the third year.  He stated his preference would have been to bring the proposal forward in a non-legislative year, however it is impossible to tell donors we won't do it this year even if it is important to them.   He noted that this item should be on Action in order to have seats ready for the first game of next season.

  Regent Hamilton MOVED for APPROVAL to move item d. to Action today. 

 Motion APPROVED UNANIMOUSLY on 7-0 vote         

Regent Mercer said this is a good way to address the deficit in the athletic budget.  It also has an economic impact and is a positive thing.  If there is criticism they should say they are not taking funds from academics but an individual who gives what will create an income producer.  He suggested that the culture of donors should be changed to where they know if they want to give to MUS for a specific thing, some small part has to go to the academic core.  He also asked if there would be additional women's restrooms.  President Dennison explained that more were added in 1995 to alleviate the shortage, but the situation will be even better after this expansion.  Regent Semmens asked if the loan had to be paid whether seats sold or not, and whether the loan from the donor would be subordinate.  Bob Duringer indicated their loan for $1 million would have primary debt service with the donor's loan subordinated.  The donor will guarantee the debt service on the rest of the stadium and even if the program fails, he will pay off his part which is the $1.1 million.  There will also be no deficit in the athletic budget next fiscal year.  Regent Jasmin reminded the Board that the football and basketball programs subsidize all the other sports on campus.

 Original Motion APPROVED UNANIMOUSLY on 7-0 vote         

e.

  Regent Jasmin MOVED for APPROVAL of Item e. 

President Gamble explained this has been planned for several years with the intention of a small reduction in the work force to deal with the fiscal problems that have been looming.  There will be moves between various accounts to assure compliance with federal laws.  Campus legal counsel is comfortable they are within the guidelines and this will create no audit exception.  There are many that are interested in the program but it applies only to a small select group of federal employees.  They have been banking toward this incentive program for the past five years and the program will cost $238,000. He explained that the Ag people are aware of the cut in personnel, but each county if more aggressive in their outreach and more prudent in management.  Seven counties will put up their own money to increase the number of agents, even during this bad economic time.

 Motion APPROVED UNANIMOUSLY on 7-0 vote

SYSTEM ISSUES

  Regent Hamilton MOVED for APPROVAL of Item a. 

 Motion APPROVED UNANIMOUSLY on 7-0 vote         

c.

Regent Roehm indicated the Board needed to decide if they wanted to use a search firm in the selection of the permanent commissioner, how to select a firm, and whether they  wanted to endorse the Governor's letter of recommendations.  Steve Snezek from the Governor's office pointed out this is an opportunity that doesn't come along often.  The Governor would like for the Board to back up and form a task force which would include all kinds of people to determine the makeup and role of the commissioner's office before determining the attributes of the commissioner.  She wants the task force to study what other states do, and to have dialogue in Montana.  Regent Roehm noted that the Board does know where it stands right now and they have a job description and expectations for the commissioner.  Steve Snezek asked the Board to work with the Governor's office to form this task force.  Regent Semmens agreed it is important to look at the role of the commissioner and management of MUS, but would not like to see a huge task force.  He also urged the Board to take prompt action because the search itself is very time consuming.  Regent Jasmin said it is a very busy time for the legislators and he worried they would not be able to break away from the session to work on a task force.  He liked the idea of input into the role of commissioner, but he sees it as the responsibility of the Board of Regents, and didn't want to see an outside body telling the Board what the commissioner would be doing.  He said at one point the Governor's office wanted her representative on the search committee, and he felt that might be a better vehicle.  He did not believe they could spend a month talking with a task force and then begin the search.  The search committee will have representatives from a number of groups, but the Board has the job description of the position.

  Regent Hur MOVED for APPROVAL of the guidelines in the Governor's letter. 

Regent Hamilton asked about restructuring the office of the Commissioner.  That goes beyond the purpose of determining the duties of the commissioner.  Steve Snezek indicated the Governor's office needs to know the structure of the office.  They have an opportunity to reassess it and can't discuss a commissioner until that is done.  They want the right person to fit into the structure.  He said he did not believe the Governor was attempting to usurp the authority of the Board of Regents, but was looking for the right forum for outside input.  He indicated he had participated in the Post Secondary Education Policy and Budget sub-committee and he found the dialogue with the two regents on the committee to be helpful.  Regent Hamilton noted that several task forces have looked at the structure and what is being asked goes beyond to the structure of the MUS.  There was the Blue Ribbon Commission, the Commission of the Nineties, and Governor Racicot's Commission.  She asked if this issue was related to the group of people that believes the structure of the constitution is wrong for Montana.  She reminded the Board the people voted in 1996 on this issue with CA-30 and they indicated their preference was the current structure.  Although pointed at the Commissioner, she indicated it is much broader than that.  Steve Snezek said the Governor believes nothing is off the table.  He believes there needs to be a constant reassessment of the structure with the question of whether the MUS is serving the students and the state.  Regent Thompson explained that the Board has been acting upon restructuring suggestions for several years.  If the real issue is whether the Board should be appointing a commissioner, that discussion needs to go on in a legislative committee, rather than the Board of Regents.  Regent Semmens indicated the process of reassessing the MUS structure is not short.  This is not the time to reassess the entire system.  Regent Hamilton noted that the constitution says that MUS shall operate as a single unit.  From the management standpoint, there is need of a single individual with authority and responsibility to be accountable.  The language of the constitutional convention said this is a lay board.  It is responsible for hiring and defining the duties of the Commissioner.  The responsibility lies with the Board to hire a commissioner. Commissioner Crofts briefly outlined the time table for hiring a permanent commissioner.  There are two basic forms of governance in higher education.  One is the university system with a CEO and single board.  The other is a board of trustees for each campus, with a coordinating board that has little power.  If the Board decides to change the position to one equal with the presidents, or an executive secretary position, the pool of applicants will be affected.  In answer to a question, Commissioner Crofts indicated in order to get a permanent commissioner in place by August the Board must make a decision at this meeting or in a special meeting to decide the issues of a search committee, use of a firm or not, the recruiting plan, the position description, and the attributes and qualities they want and get it in the Chronicle of Higher Education as soon as possible.  He reminded them this is not just a search process but a recruiting process which is equally important.  If the position will be under review it will be difficult to recruit unless it is changed from CEO to Executive Secretary who directs or coordinates the activities of the Board.  Regent Mercer said it was interesting how the Board members were critical of the governor's letter although the Chair did the same thing with the letter he sent out.  He said it would not be proper to advertise the position since they will have to wait till March 17 for input from that letter.  He wants to change the way the commissioner operates and so does the governor.  He said the Board as a whole does not want to do so.  Until there is a different Board, he thinks it makes no sense to look at this issue.

Regent Semmens offered a SUBSTITUTE MOTION for APPROVAL to direct the Chair to quickly form a Task Force on the role and structure of the Commissioner and the office of the Commissioner of Higher Education and how it is done in other states with the group to provide its findings to the Board by the first week of March

Regent Hur asked if his motion could go forward and then Regent Semmens'motion go forward.  Regent Semmens indicated he preferred the vote was on his concept.  Regent Hamilton thanked Regent Semmens for his interest, but indicated they have received a great deal of direction already, and she is reluctant at this time of change in leadership and budget problems, to redo either the system or the commissioner's office, and the governor's letter goes much beyond the request in the Chair's letter.  Regent Mercer said the above discussion drives him crazy.  He doesn't think they need a commissioner to operate and wants administration and staff to freely answer what would happen if the position was left vacant.  He stated he agrees with the governor that this is the time to do it.  Regent Thompson asked if the Board would change direction when they receive input from Lt. Gov. Ohs, Senators Baucus and Burns, and the others on the list.  She respects the letter from the governor, but asked about all the other people who may not agree with what she is asking.  How would the Board respond to them?  Regent Roehm indicated the search firms said the letter requesting input was the first step, and he had already done that.  Regent Semmens envisioned have a meeting on the Wednesday before the March meeting to receive the findings and thoughts of the task force and the recipients of Chairman Roehm's letter, with advice from Carrol Krause and senior staff.  Regent Hamilton asked what the charge to the task force would be.  Regent Semmens said they would examine how higher education is managed in other states, and what the committee thinks is the best role for the commissioner in Montana.  Regent Hamilton asked if the task force was to recommend the role of the commissioner and Regent Semmens indicated yes.  Regent Hamilton then asked him if the Board wasn't assigned by the constitution to do that, and why they would want to delegate that to a task force.  He indicated it would be made very clear the task force was advisory in nature and the Board would make the decision.  Regent Semmens restated his motion.

  Regent Semmens offered a SUBSTITUTE MOTION for APPROVAL to direct the Commissioner to work with the governor's office and quickly form a Task Force to examine the issue of the most effective role of the Commissioner of Higher Education in Montana and review its findings with the Board before the March meeting.

 Motion FAILED on 4-3 vote with Regents Hur, Mercer and Semmens supporting.

 The original Motion by Regent Hur FAILED on 5-2 vote with Regents Hur and Mercer supporting.

  Regent Hur MOVED to have the search committee include the seven members of the Board, and the ex officio members, and the governor can designate her delegate

Regent Semmens asked if the interim commissioner was ex officio and Regent Roehm indicated yes.  Regent Mercer indicated the Commissioner of Higher Education is not ex officio, just the secretary to the Board.  Commissioner Crofts said that although time consuming the Board needed to talk about how they envision the search.  Would the Board be the search committee?  He recommended they be.  Typically a search committee is formed with the responsibility to make recommendations to the Board.  He recommended against speeding through the process.  The commissioner has a peculiar relationship with the Board which is different than any other employee.  He stated the options of the Board were to have a traditional search committee, or they could be the search committee.  None of the Board members has the time or contacts to recruit.  He indicated both Carrol Krause and Joyce Scott have volunteered to help them, and the search firms would love to help.  If the different parts of the search/recruitment are discussed separately the Board could go astray.  They need to discuss all the issues and then reach consensus.  Regent Roehm indicated the Board could tie themselves in knots by doing this piecemeal.  That's what search firms are hired to do.  He asked the Board to look at the two firms that had sent proposals.  Deputy Commissioner Scott noted that a search firm would take the information collected by the Board and use it in seeking consensus on the role of the position.  Having facilitated the search for President Gamble, she explained that she put in one third of her more than 40 hours per week on it.  Unless the Board directs the firm to identify a specific number of candidates, they will be more active in generating applicants which the Board then would review and give a thumbs up or down.  There is a lot of time involved in it.  Commissioner Crofts indicated that in that case they used a campus based committee, but they could hire a search firm now and tell the firm to bring a specific number of the best candidates by a specific date.  At that point the Board could discuss the attributes of the applicants but until then they would not hear much from the firm.  It would be less time consuming than the process used for President Gamble.

  Regent Hur restated his MOTION to have the search committee include the seven members of the Board and the ex officio members, and the governor can designate her delegate.

The meeting recessed at 11:55 for lunch with student representatives followed by a meeting with representatives of classified staff.

The Board reconvened at 1:30 p.m.

c.

Regent Mercer asked if the Board was excluding others they would expect to be involved in the search like faculty and citizens.  He wanted to hear from those who were not at the table to see if this is what they had in mind or if they wanted it to be broader.  Since the Board is so closely aligned with the Commissioner, it is like picking their own.  Regent Semmens indicated he didn't believe he had the knowledge to make a judgment as outlined.  He suggested perhaps directing the Chair to work with Carrol Krause and Dick Crofts and to visit with the legislative committee on the 27th when the Board would have a special meeting.  He wanted to have input from some of the people Regent Mercer had mentioned.  Regent Jasmin reminded the Board to be realistic if committing to be the search committee.  It would take a lot of time.  Regent Roehm said the Board would make the final selection since the commissioner works so closely with them.  If a search firm is chosen, the Board can give the criteria to be used in the process.  They can ask the firm to bring forward a certain number of non-ranked candidates and the Board would then sit down and decide.  He offered to speak with each of the firms before the meeting on the 27th.  Chancellor Gilmore believes the search committee will not make the decision, but rather the Board would.  However, OCHE staff should have a representative on the committee, as well as some of the campuses, and perhaps the local executive boards that have formed a group.  Chancellor Hulbert indicated he was not keen on using search firms because of the cost involved.  He suggested that SHEEO might be able to work with Carrol Krause to get a significant pool.  Dean Hoyle wants to have a representative on the committee to advocate for two year schools.  President Dennison did not believe it was a good idea to use the time of all these people to do initial screenings.  He believed working with a search firm to identify four or five candidates would be best and then to get input from the campuses on those individuals.  Chancellor Sexton agreed with President Dennison that a firm would do a good job, and the time for others to be represented is when the pool is limited to six or so.  Chancellor Capdeville agreed that a firm would give good guidance and would get it accomplished.  Dean Moe indicated that Dean Hoyle expressed her thoughts.  President Gamble agreed with President Dennison, and indicated he preferred smaller search committees, and recommended the Board have a clear idea of what they want when they start the search.  He would not feel a need to be on a search committee, but would like to have input when the pool is established.  President Hammon agreed and said the Board needed to have specific criteria and background that they want in the state of Montana and it must be presented clearly to the firm.  He also wants input for the two year colleges.  President Karas told the Board it was for them to identify the criteria for the new commissioner.  She would like to meet with the final pool and have the opportunity to give input.  President Hetrick agreed.  Commissioner Crofts stated that the motion as stated is appropriate to involve ex officios in the process, but it is not appropriate to allow designees because they would be proxy staff members.  He asked to amend out the designees.  Regent Roehm asked Regent Hur if he meant as voting members and Regent Hur replied yes.  Following further discussion and the agreement to come back in Special Meeting on January 27, 2003 to address these issues and identify the process for the selection of a permanent commissioner-

 Regent Hur  WITHDREW his motion   

   Regent Jasmin MOVED to REAFFIRM POLICY 204.3 describing the role and duties of the Commissioner

Regent Jasmin stated the Board had spent a lot of time discussing and adopting the duties of the commissioner and he hoped the Board would reaffirm those duties and move in that direction until the majority feels it is not appropriate.  Regent Semmens indicated he hoped to discuss this issue at the special meeting on January 27.  Regent Jasmin replied that all these details were worked over in many meetings and workshops and asked if anyone thought it could be reworked in 11 days.   Regent Roehm reminded the Board that the firms will need to know what the position will be before they come on the 27th to make their presentations and appropriate bid proposals.  Making changes on the 27th would be a bad idea.  Regent Thompson said she was amazed at the amount of time being spent on this issue when they had deliberated and voted unanimously on it already.  If this was to be done with every policy, she asked where the progress would be for the Board and the MUS.  Regent Mercer agreed, but insisted that the document is not accurate and he wanted all the applicants to know that he would continue to do his best in the future to get it changed.  Regent Thompson stated there was not one board member who was not willing to work with the Governor.  But most people also realize what is being done to politicize the Board.  Those who came through other boards have different thought processes and philosophies.  She assured Regent Mercer it had nothing to do with going after him.  It is how the rest of the board members perceive the way things should be done.  She noted she was appointed as a member of a governing board, and partisan politics needs to be kept at arm's length from education and she took exception to his attack on the board.

 The Motion was APPROVED on 5-2 vote with Regents Hur and Mercer dissenting         

d.

   Regent Mercer MOVED for APPROVAL of Item d.

Regent Mercer explained this item would add language to item 7 and delete item 8.  Regent Semmens indicated these were sensible changes because they reflect reality.  The Board has no intention of prohibiting anyone from making presentations to the legislature.  Regent Thompson asked the presidents out of curiosity if they felt this policy muzzled them.  Each of them replied they did not, and in fact they have spent much time before the legislature.  However they both agreed that there needs to be one voice that speaks for the system, and they make it clear they do not speak for the system but for themselves.  President Dennison compared it to UM where anyone can say anything they want to say, but he is the only one that speaks for the campus.  Regent Hamilton said it is important to identify the lines of responsibility, and the commissioner is responsible to present the MUS to the legislature.  He is the employee of the Board and may delegate anything to staff but he is held responsible.  She does not want to see the lines of accountability muddied.  Commissioner Crofts believes that successful, experienced administrators in higher education are balanced at realizing the perspectives of the institution must be respected while never compromising the right of individuals to have their own opinions.  He emphasized that he has never done anything to  compromise or muzzle any individual from expressing opinions.  However, there must be a spokesperson for the MUS.  All these opinions cannot be given as being expressed by the institution.  Even he has made clear to the legislature when he was expressing his own opinion and not that of the system.

 The Motion was APPROVED on 4-3 vote with Regents Hamilton, Roehm and Thompson dissenting.        

e.

   Regent Mercer MOVED for APPROVAL of Item g.

Commissioner Crofts indicated the new format for staff items would come to them at the March meeting.  He asked for their concurrence that this policy become effective on July 1, 2003 in order to provide time to incorporate the additional information.  The two presidents indicated their people would be able to implement this policy, but Regent Hamilton said she would vote against it for two reasons.  First, it discriminates by separating out Board of Regent contracts from the others.  She indicated Regent Mercer was concerned people were being hired before the Board approved a contract.  However, there is still the condition that says it can be approved at the first meeting following commencement of the contract.  Regent Roehm asked Regent Mercer if he was comfortable with the recommended effective date and he indicated he was.

 The Motion was APPROVED on 4-3 vote with Regents Hamilton, Roehm and Thompson dissenting.        

Regent Hur MOVED for APPROVAL of Item h. as an action item and with Section e. added indicating all donors and donations must be made public.

Regent Hur explained he believed this proposal would save taxpayers money and offset student tuition increases.  Regent Thompson said she has worked in philanthropy for 40 years and once the donors name is required to be public, the majority of donations to any foundation or other entity will dry up.  Many people want to share but they do not want their identity known.  Regent Hur then suggested that the name could remain anonymous to the person receiving the funds.  It was pointed out that it would take only a phone call or two for that person to find out who the donor was.  Commissioner Crofts indicated that if this was put in place, the funds would come from unrestricted gifts and it would be impossible to identify who gave the gift.  He suggested that if it does happen the decision be made by the foundation rather than the individual soliciting donations for their own benefit.  Asked if he would lower salaries, Regent Hur indicated that instead of approving large increases for executive salaries, they could be offset by  foundation dollars, and if they were already getting a donation, the Board wouldn't have to give them a raise.  Regent Hamilton asked if the item could be divided in two for a vote.  Regent Jasmin reminded the Board of the work done four years ago with the Foundations, and the Board requires they be audited but the confidentiality is protected.  Regent Semmens said he values what the foundations provide the campuses and would encourage them to continue.  They provide academic and student help.  He believes this should continue and that executive compensation is best addressed directly.  There would also be disparity from campus to campus because of smaller foundations and it won't alleviate the fiscal problems.  

  Regent Hur called for the question, and asked to split the item and vote on the original proposal and then vote on Section e.  

  Regent Hamilton indicated her original intent was to separate Sections 1 and 2 from each other.

  Regent Hur then moved for approval of paragraph 2 by itself

Regent Jasmin stated in answer to objections that this was being done in many universities and there have been articles on it in the Chronicle of Higher Education.  It is happening more in private institutions, but the trend is moving that way.  A conflict of interest on the part of the CEO would be prevented by putting such a proposal through the approval process of the governing board.  President Dennison believes that at some point in the future the Board will need to have the ability to do this.  The policy is permissive and the Board would approve the increment, not the foundation.  Regent Mercer said outsiders will be paying the CEOs and they will be owned by such companies as Touch America, Coca Cola, Ted Turner, and others.  Regent Thompson asked if the deans of the colleges of technology needed to be included in sections 1 and 2.  President Dennison noted that in Missoula they have captive professorships with an endowment paying them in addition to the salary the University pays them.  He asked why it was alright for faculty to do that but not the CEOs.  Regent Semmens agreed with President Dennison.  Market conditions are critical, and Regent Jasmin had found that 1/3 or fewer of the public institutions were doing this.  It isn't the market norm yet, but the Board needs to be open to change.  Commissioner Crofts stated with respect to the issue of going beyond presidents and chancellors he would not hurry into adding other people since their foundations would be small if they existed at all.  Regent Roehm indicated there would still be disparity between CEOs with small foundations compared to those with large foundations.  Commissioner Crofts indicated this is a significant issue.  It puts people in the position of happening to be the CEO of a campus with a successful foundation and thus having the advantage over other campuses with diminished resources.  He believes that sooner or later the Board will want to do something like this in order to come to grips with executive compensation, general funds and these kinds of agreements.  Although no more than 30% in the country now do it, the executive salaries in Montana are already 20% to 50% off the market.  When 1/3 of the institutions are doing it, Montana is thrown further off the market.  Most campuses pay CEOs more than Montana does, but he understands the political implications and public relations issues involved with this.  Although successful in recruiting President Gamble, the situation is becoming worse.  He suggested that equity could be handled with public funds.

Paragraph 2 FAILED on 5-2 vote with Regents Hur and Jasmin supporting.      

   Regent Hur then moved for approval of paragraph 1, striking the underlined words.

Paragraph 1 APPROVED unanimously on 6-0 vote with Regent Hur absent for the vote.

Regent Hamilton moved for APPROVAL to move item I. to Action at March 20-21, 2003 meeting.

Regent Hamilton stated the committee had been charged to bring forth a proactive tuition policy for Board consideration and this document was the result of their work.  Since it was close to 5:00 p.m. Regent Roehm asked the Board and others to propose questions to Regent Hamilton which she would answer the next day.

The Board recessed at 5:00 p.m.

FRIDAY, JANUARY 17, 2003

The Board reconvened at 8:40 a.m.

STUDENT REPORTS

Dan Geelan, MAS President 

Mr. Geelan reported that MAS was very impressed with the student lobbyists this session.  He noted that on April 11 the students will hold a bag lunch in the rotunda of the capitol for the legislators.  Last weekend MAS had a retreat in Helena with a number of legislators showing up.  They were provided with contact information for the student leadership with the offer of any help they might want.  He also mentioned that Jesse Mahugh from Flathead Valley Community College was currently in Seattle undergoing treatment and surgery for his brain tumor.  No further information was available on his condition.

Please see attached reports.

END STUDENT REPORTS

ADMINISTRATIVE/BUDGET ITEMS continued

President Dennison reported there would be an administrative transfer for the cost of insurance in the amount of $4692 for the next biennium.

Item b. APPROVED as an ACTION item on 5-2 vote with Regents Hur and Mercer dissenting.    

SYSTEM ISSUES continued

Regent Hamilton accepted recommendations on the draft policy to be presented to the Tuition Policy Committee and returned to the Board at the March 20-21, 2003 meeting.

 Item l. APPROVED unanimously to move to ACTION at the March 20-21, 2003 meeting on 6-0 vote with Regent Jasmin absent for vote.

o.

p.

   Regent Mercer MOVED for APPROVAL of item q.

Regent Semmens acknowledged that the solution to the fiscal problems of the state is a strong economy, however he indicated he would not support the resolution since it says either increased taxes or a strong economy.  It isn't high taxes and a weak economy or low taxes and a strong economy or vice versa.  That is an ideological view that he did not believe the Board should take.

 Motion FAILED on 3-3 vote with Regents Hur, Mercer and Roehm supporting and Regent Jasmin absent for the vote. 

   Regent Hur MOVED for ADOPTION of the third paragraph of his proposal

  Motion FAILED on 4-2 vote with Regents Hur and Mercer supporting and Regent Jasmin absent for the vote.

s.

t.

   Regent Hamilton MOVED for APPROVAL of  item t.

  Motion APPROVED unanimously as amended on 6-0 vote with Regent Jasmin absent for the vote.

   Regent Hur MOVED for APPROVAL of  the two sections of item dd. separately.

Motion FAILED on 4-2 vote with Regents Hur and Mercer supporting and Regent Jasmin absent for the vote.

Chief Legal Counsel Schramm explained that the Court handed down its opinion on the 10th of January.  The most troublesome aspect of the decision is that it lays out no guidelines for how the principle is applied, and there are no reasonable bounds on that principle.  Under the ruling it is impossible to meet the statutory requirements that a quorum be present (there is no fixed membership), that voting be recorded (there are no votes taken) and minutes taken.  Would it apply to a meeting of the Commissioner with a president, or two presidents, Rod Sundsted with the Chief Financial Officers, 

Joyce Scott with the Chief Academic Officers, Presidents with their Deans?  Open meetings require notice, minutes and votes.  Mr. Schramm spoke with dozens of attorneys of all kinds, and the Attorney General's office, and they all say this will be impossible to live with.  A few weeks before this decision Judge Sherlock issued a decision that seems to be contrary.  He said meetings between EQC employees talking about coordinating with EPA did not have to be open to the public.  That decision will not be appealed.  The MUS has an untenable situation and the time to appeal is running.  He asked the Board for their guidance in appealing Judge Honzel's decision.  He said there was nothing to lose by appealing, as the Board will likely prevail, but even if not they will receive clearer guidance on what is covered and what is not covered.  If the Board wants the Senior Management Committee meetings to be open, they can always make a policy to that effect, but MUS as well as most other public agencies need the guidance an appeal would bring.  There are good legal grounds for the appeal and in his view the MUS is in an untenable situation as it stands.

   Regent Hamilton MOVED for APPROVAL to pursue the appeal of Judge Honzel's decision.

  Motion CARRIED on 4-2 vote with Regents Hur and Mercer dissenting and Regent Jasmin absent for the vote.

  Regent Hur MOVED for APPROVAL of item u as amended.

  Regent Hur WITHDREW his motion.

   Regent Hur MOVED for APPROVAL of item v.

President Dennison opposed this item since it opens all fees, course or otherwise to this procedure.  Originally it was set forth by Student Regent Thielman to deal with mandatory fees and tuition.  This goes beyond that policy.  Commissioner Crofts agreed that it was a significant expansion of the policy.  However a fee is a fee and just because it will be applied to a limited number of students does not make it less important.  Regent Semmens noted this would affect perhaps 20 students in an art class for supplies, or other such courses.  MAS President Dan Geelan indicated it would put accountability on each student government to go to those 20 students and get their input to pass on to Administration since they are the representative voice.  He also indicated that the entire Agenda packet that goes to the Presidents should be sent to the student government on each campus.

  Motion APPROVED unanimously on 6-0 vote with Regent Jasmin absent for the vote.

Item w. was pulled from the agenda.

y.

Fiscal Austerity Measures (Discussion Item) (Student Regent Hur)

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DISCUSSION WITH CAMPUS CEOs/COMMISSIONER

Please see attached reports

PRESENTATIONS

Regent Hamilton Moved adoption of the following Resolutions

Whereas, Margie Thompson's seven year term as a member of the Board of Regents of Higher Education is about to come to a close, and

Whereas, during her term Regent Thompson served as Chair of the Board of Regents for a two year period, and

Whereas, Regent Thompson guided the Montana University System during a challenging period of significant change, and

Whereas, Regent Thompson displayed a willingness to spend seemingly endless hours on University System business, demonstrated, for example, by her thorough preparation for meetings and attention to detail, and

Whereas, Regent Thompson consistently displayed good humor and optimism even when tension was high and the challenges were considerable;

Therefore, the Board of Regents of Higher Education Does Hereby Resolve: 

To thank Margie Thompson for her valuable and conscientious service to the State of Montana and to the Montana University System, and

To wish her and her spouse, Jim, success in all their future endeavors.

Adopted at a regular meeting of the Board of Regents held in Helena, Montana, on the seventeenth day of January, 2003.

Whereas, Dr. Richard A. Crofts, who has served as Commissioner of Higher Education since 1996 and Deputy Commissioner for Academic and Student Affairs for two years before that, has announced his imminent retirement, and

Whereas, Dr. Crofts was instrumental in designing, implementing or otherwise fostering significant changes during the eight years he served the Montana University System, and

Whereas, Dr. Crofts was instrumental in implementing the Regents' plan for restructuring the University System, resulting in increased cooperation and coordination in both administrative and academic matters, and he also pursued a policy of rigorous program review, resulting in a streamlining of academic offerings, and   

Whereas, Dr. Crofts successfully fought for the renewal of the University six mill statewide levy by Montana voters, and also successfully argued for the defeat of a statewide ballot measure that would have eliminated the Board of Regents as an autonomous governing board for the Montana University System;

Therefore, the Board of Regents of Higher Education Does Hereby Resolve:

To render to Dr. Crofts their collective thanks for his loyal and dedicated service to the Montana University System, and

To wish him and his spouse, June, a long and happy period of retirement.

Adopted at a regular meeting of the Board of Regents held in Helena, Montana, on the seventeenth day of January, 2003.

  Motions APPROVED unanimously on 6-0 vote with Regent Jasmin absent for the vote.

END OF PRESENTATIONS

With no further business to come before the Board, the meeting adjourned at 12:10 p.m.

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