BOR Minutes: July 11-12, 2002

APPROVAL OF MINUTES

  Regent Jasmin MOVED for APPROVAL of the Minutes of the April 24, 2002 Special Meeting in Helena, and the May 23-24, 2002 as AMENDED Regular Meeting in Dillon, Montana as circulated

     The Minutes were APPROVED unanimously as AMENDED.

Chancellor Gilmore reported that Bob and Pauline Poore of Butte want to contribute an entrance gate to Montana Tech which will be on Park Street just before the railroad.  There will be two granite sides with an arch over the top to frame Marcus Daly at the top of the hill.  This project will be on city property.

President Gamble introduced Dr. Jim Rimpau, Executive Director of the Office of Planning and Analysis.  He came to MSU-Bozeman from Washington State University.

President Karas introduced Lisa Stich, the new Vice President of Instruction and Student Services at Flathead Valley Community College.

President Hetrick introduced C. J. Law, the new Dean of Instruction at Dawson Community College.

Commissioner Crofts noted that ITEM 116-2015-R0702 Approval of Lease of Private Facility Space for Externally Funded Research Programs; Montana State University-Bozeman would be moved from the Consent Agenda to the Administrative/Budget Items later in the meeting.

CONSENT AGENDA

Staff Items:

a.

Item g. was amended by the campus to reflect a correction in the item for Ted Plaggemeyer

   Regent Hamilton MOVED for APPROVAL of all Staff Items as amended.

  Motion APPROVED unanimously on a 6-0 vote.

a.

ITEM 116-104-R0702 - Final Approval of New Procedures for Level I and Level II Items 

Level I Summary Sheet   New Guidelines  Level II Calendar

a.

ITEM 115-2007-R0502 Approval of Long-Term Maintenance Plan; Montana State University-Bozeman  Attachment 1    Attachment 2

b.

ITEM 115-2008-R0502 Authorization to Transfer Certain General Operating Funds Exclusively for Future Scholarships and Stipends; Montana State University-Bozeman

  Regent Hamilton MOVED for APPROVAL of  Items c. and d.  

  Motion APPROVED on a 5-1 vote with Regent Hur dissenting.

e.

a.

Regent Hamilton MOVED for APPROVAL of  Item a.

Motion APPROVED unanimously on a 6-0 vote.

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SYSTEM ISSUES

a.

Associate Commissioner Sundsted noted he made contact with DNRC who indicated they were waiting for a legal determination on how they have handled the assessments in the past, and therefore could not give an answer to any questions raised.  (Please see his memo for more detail).  Discussion ensued on the substance of the memo and what would be best for the MUS.  

  Regent Jasmin MOVED for APPROVAL of Item a.

  Motion APPROVED unanimously on a 6-0 vote.

b.

Chief Legal Counsel LeRoy Schramm indicated that the legal impropriety of taking administrative assessments from the Morrill Act funds at MSU is clear.  For the other campus funds the legal arguments are not as straightforward, but a good case can still be made that the assessments are improper.  He also noted that it is clear under federal and state law that the income can only be used for the management of the land encompassed by each fund.  DNRC has lumped all of MUS and K-12 funds together, with K-12 funds being considerably higher than MUS funds.  If this is illegal, then there must be a detailed time and effort accounting as is done for federal grants.  He questioned what the remedy would be if it is found that what they have been doing is improper.  LeRoy Schramm believes there is no statute of limitations to restore the funds to the trust.  He noted that there is the potential for this to go well into seven figures if restored to its proper position.  There are two components of the trust funds, land plus the gas and mineral rights, and then the permanent monetary fund.  Income to each trust is from rent, timber, royalties, and grazing.  If the handling of the funds has been done improperly, it ultimately rests with the Legislature since it is done pursuant to state statute.  The two agencies that receive these funds are DNRC and to a much smaller extent the State Board of Investments.  Chief Legal Counsel LeRoy Schramm will discuss with OPI Legal Counsel, Jeff Weldon the issues and he will then draw up the necessary legal papers to initiate an action.  It will be brought before the Board for approval probably at the September 19-20, 2002 meeting.  The complaint, if filed, would be filed in State District Court in Helena.

   Regent Hur MOVED for APPROVAL that University System Legal Counsel be directed to further explore the legal issues relating to administrative fee assessments and prepare documents necessary for an appropriate legal action seeking judicial resolution of the questions raised, and to bring the same back to the Board for consideration prior to the initiation of any action. 

Motion APPROVED unanimously on a 6-0 vote.

c.

Commissioner Crofts explained that since the preparation of the Agenda, things have changed significantly with regard to the FY03 budget.  The plan presented represents the 3.5% reductions, with expenditures and tuition surcharge.    It is likely the Governor's budget will call for another $5.1 million reduction for the MUS which would be 7% versus the 3.5%.  He reminded the Board that OCHE will present to them at the September meeting the operating budgets that encompass the legislative actions.  Campuses will be sending out bills for fall semester within the next 7-10 days and need direction from the Board.  The first 3.5% reduction was left to the Governor's discretion and is therefore final.  The added 3.5% will be presented to the legislature at the special session.

President Dennison indicated his preference was to move ahead with the 3.5% plan.  They have already taken steps on their campus to mitigate the impact on students, and protect quality.  He wants students across the country to understand that UM is dealing with this situation.  President Gamble indicated that they have charted their course at the 3.5% plan, and a lot of hard work went into it.   It was noted that at the 3.5% reduction, it would cost each student approximately $22.50 more per semester, but at 7% it would be about $72 in fall, and about $100 in spring.

   Regent Hamilton MOVED for APPROVAL of the 3.5% reduction plan.

Discussion ensued on the different splits between reductions and surcharges on the various campuses.  Since the Board had given no clear guidance to the campuses on how to approach the 3.5% plans, they had used the best approach for their own campuses.  A variety of cuts were made in some reserve accounts (Billings-Enrollment Reserve; Bozeman-General Account Reserves), a variety of surcharges were applied from one campus to another and different areas of the campus budgets were cut.  Efforts were made to mitigate the impact to the smaller campuses.  Student leaders indicated they are concerned about quality and endorse the tuition surcharge as proposed.

Chairman Roehm quoted from the Montana Constitution, Article X, Section 10, The funds of the Montana university system and of all other state institutions of learning, from whatever source accruing, shall forever remain inviolate and sacred to the purpose for which they were dedicated.  However, the Board of Regents have chosen not to pursue this right legally at this time since it realizes that the State is in financial trouble and it needs cooperation from everyone.  

  Regent Hamilton amended her original motion to read The Board of Regents concludes that consistent with the authority granted to it in Article X, Sec. 10 of the Montana Constitution it alone has the authority to make the decision to expend University System funds at levels below that appropriated by the Legislature.  Nevertheless, the Board has chosen to voluntarily comply with the Governor's request to reduce state spending.  Therefore, the Board directs the constituent parts of the University System to adjust spending levels as indicated herein. 

   Regent Semmens offered further amendment that the first 3.5% planned tuition surcharge be in fall semester, and any subsequent plans for budget reductions from the special session to be presented at the September 19-20, 2002 meeting reflect the tuition surcharges not exceed 50% of the mix.

There was discussion of whether the surcharge under the current 3.5% plan was to be applied fully to the fall semester, or if it should be split equally between the fall and spring semesters.  The students prefer to have it split between the two semesters.  It was Regent Semmens intention that it be applied fully to the fall semester which would thereby double the amounts quoted in the plans.  Any further reductions would then be covered in the spring semester.  The campuses indicated they had prepared these plans to cover two semesters.  Regent Semmens indicated that if that was preferred he would have no problem with it.  He also noted that the 50% maximum on tuition surcharges does not apply only to the spring semester and additional cuts, but to those plus the surcharges being presented in the current plans.

  Regent Semmens further amended his amendment to apply the tuition surcharge evenly at a weighted average of about $38 for a full-time student each semester of the coming year. Any further action following the special session will not include more than 50% in tuition surcharges (to be the total of all four campuses from each side of the system).

Amendment APPROVED unanimously.

The original motion as amended was APPROVED on a 5-1 vote with Regent Hur dissenting.

d.

Item d. was dropped from the Agenda. 

   Chairman Roehm requested the consensus of the Board to form a committee on Tuition Policy. 

He noted that currently tuition is used to make up differences in funding, but he indicated the system should consider such things as financial aid and what type of students they want to attract.  It should be a top down policy on establishment of tuition.  He would expect the committee to review all the options and bring forth a proposal to the Board at the September 19-20, 2002 meeting. 

  There was consensus of the Board to form the Tuition Policy Committee

Chairman Roehm asked that he have a list of names by Friday morning from the CEOs with one person from each two-year, four-year and research unit, as well as Dan Geelan suggesting two members from the students.  One member will be appointed from the Commissioner's Office and Regent Hamilton will chair the committee and Regent Hur will sit on the committee.

Chairman Roehm acknowledged that September might be too ambitious a goal for such a complicated issue, but indicated he would like to have a progress report at that time.

e.

It was acknowledged that this plan may be changed following the special session.

   Regent Hamilton Moved APPROVAL of Item e. 

  The motion was APPROVED unanimously on a 5-0 vote with Regent Thompson absent for the vote.

f.

Rod Sundsted explained that the list presented was divided into two sections for cash building/renovation programs.  The first fourteen priorities have consensus.  Items 15, Gaines Hall and 16, Helena COT could be reversed.  Last year for the 2001 legislative sessionGaines Hall was the MUS priority over the Helena COT, however an executive decision moved Helena ahead.  Both campuses argued that their item needed a high priority.  His second issue was with item 18 from MSU-Billings for the COT.  They have currently raised $1 million of a needed $2 million.  The first fourteen items total $13.8 million with only $5 million available.  The balance comes to $45 million, and he indicated he did not expect to see a bonded program approved.

   Regent Jasmin Moved APPROVAL of Item f. 

  The motion was APPROVED unanimously on a 5-0 vote with Regent Hur absent for the vote.

g.

Commissioner Crofts noted that Initiatives one and two had been fine tuned from the previous version.

  Regent Thompson Moved APPROVAL of Item g. 

Regent Semmens indicated he didn't like the proposal or the format.  He thought the previous document was better.  He could not support an exhaustive explanation of the individual initiatives.  He wants that information included in Exhibits, and he also wants the Community Colleges included.  As to the substance, in Initiative One the amounts were reduced but of a $1.5 million total, $175,000 are from MSU.  Regent Semmens could not accept that MSU had no more than this.  As for Initiative Two on rural development, 100% was from MSU and none from UM.

Commissioner Crofts reminded the Board the plan was to have several versions of the proposal for specific uses.  His office has been caught between specific return on investment and specific accountability measures.  Accountability measures need to be tied to certain programs.  As to the investment initiatives, they are split somewhat arbitrarily since nearly all of them overlap both categories.  After considering combining the two initiatives, he believed the political benefit of what MUS is doing for rural Montana would be better captured in the second initiative.

Regent Semmens indicated he found that hard to accept.  He believes it doesn't serve MUS interests to be inferring that one campus or the other has little to do with one section or the other.  As far as the form of the document was concerned, he couldn't believe this would be an effective document for legislators who are considering a whole lot of other issues.  He wants exhibits with a summary of each item.

Regent Hur indicated he had no problem with the substance of the document and was impressed with MUS staff who drafted the document.  He noted that specific dollar amounts were shown, and they all showed economic development.  He was interested in approving the document with the understanding that it be turned into a flashy presentation.

Commissioner Crofts indicated that it was the plan to include the Community Colleges, but the information had not been available when the document was mailed.  Rod Sundsted also indicated that Yellow Bay, Forestry and the Bureau of Mines will also be added.  Superintendent McCulloch indicated an executive summary would entice the reader to look further into the document.  As it is, the legislature already is presented with too much information.

Chairman Roehm asked the Regents if they were comfortable altering the substance and form.  Regent Semmens asked President Gamble about their presence in only one initiative.  He replied they have the Circle of Health, which is health care and nursing and it is in the heart of rural Montana, but it strikes to work force development.  It could have been in the other category just as well.  He believes that people will read only the first glance, and he could offer no ideas to correct the problem.  He suggested perhaps it should be only two or three categories.

Regent Hamilton noted that what was missing was the original intent to use the document as a presentation to the legislature.  The document does not talk about MUS Strategic Planning efforts.

Dean Moe said that after this much revision of a document, the exciting element tends to be lost.  She believes that some of that original excitement needs to be shown with projects and stories, and the outline added at the end.

President Dennison noted that pages 2, 3 and 4 of the introductory statement include the contributions that have been made and where they have been made.  The one page summary of base needs is straight forward.  Perhaps there could be one page on each of the four initiatives.  Perhaps a division of the initiatives would be better if it all went back to work force development, which is Initiative One.  All of the initiatives proposed are still work force development.  He suggested that strictly rural initiatives would be such things as the Ag Experiment Stations, the Extension Service, and the agencies.  The legislators will look at the summary, but there needs to be additional material available to them.

Regent Semmens remained in support of four initiatives.  MUS is an investment in the state.  The system is addressing problems, thinking of investments in better technology, work force development and rural development.  He wants to see a synopsis by bullet with the key elements of the proposals, and return on investment and accountability detail in a separate section.

The motion presented was APPROVED unanimously on a 6-0 vote with the understanding that OCHE would incorporate the suggestions and comments from this meeting and to include the Community Colleges.

Chairman Roehm asked the Commissioner to work with Regent Semmens and the two Presidents to produce a document acceptable to the Board.

h.

Chairman Roehm explained that the State Statute simply states that Regents will be reimbursed for whatever they submit.  With the present crisis in the state budget, he believes it prudent to have an in-house policy that prevents open ended spending which would leave the MUS open to criticism.

  Regent Hur Moved APPROVAL of Item h. 

Regent Semmens indicated his support for this item as it adds clarity and structure.  He also noted that in reality, the Regents spend many days on university system business without a request for reimbursement.  

  Regent Semmens then MOVED that for FY03 the Regents forego per diem.  

Commissioner Crofts asked the Regents to indicate on the reimbursement form which meals have been provided for them at each meeting as they should not be reimbursed.

   Regent Semmens further MOVED that half of the amount saved on unclaimed per diem be allocated to MTAP to benefit students and that half be used as a true reduction.

It was explained that only the $50 per diem would be given up, but all expenses would be reimbursed.  Student Regent Hur indicated that as a student it would be very difficult to manage without the per diem.

  Regent Semmens modified his motion to make it voluntary and only for FY03.

It was recommended the Regents indicate on their reimbursement forms their preference not to be reimbursed for per diem and if they wished, could make one statement for the entire FY03.

The motion as amended was APPROVED unanimously on a 6-0 vote.

i.

j.

   Regent Semmens MOVED APPROVAL of Item j. with the fourth bullet from the bottom struck from the document and the date advanced to the January 16-17, 2003 meeting.

The motion with amendments was APPROVED unanimously on a 6-0 vote.

Chairman Roehm requested the Committee at least give a report at the November 21-22, 2002 meeting.

k.

Since the Interim Committee will meet in September for the last time this year the Commissioner asked the Board to give its endorsement to this item at this time.  He noted that his office would discuss the first five items with the Interim Committee in September, but those on the second list still have questions related to them with the exception of number four.  It is not required to get a statutory change for the names of the Colleges of Technology. 

There was discussion of extending the loan repayment program to all majors rather than limiting it to teachers.  Commissioner Crofts indicated that the cost of such a proposal would be too much to handle, and noted that teachers are paid less than nearly every other profession in the state.  Superintendent McCulloch reminded the Board that at the last session the Legislature passed a bill that addressed this issue but provided no funding.  The Commissioner noted that there is a very successful program in Montana that does what this proposal would do.  However it has no state funding.  The Rural Physicians Incentive Program loans for those serving in specified rural areas of Montana, is financed by a surcharge paid by Montana students enrolled at The University of Washington Medical School through the WWAMI program.

   Regent Hur moved APPROVAL to proceed as recommended by the Commissioner.

The motion was APPROVED unanimously on a 6-0 vote.

l.

Regent Jasmin noted that the committee looked for areas that could be measured, the legislators might want to see and the public would want to see.  They voted on six areas and chose the two most important.  They agreed that 1) they should not be put in statute, but rather only in an agreement between the MUS, the Board of Regents and the Legislative Subcommittee.  The ending date would be January 1, 2005.  2) The subcommittee is made up of members from the Senate Finance Committee and the Education Committee and they understand that the MUS budget is so important they will recommend to the Education Committee this be made a permanent committee of the Legislature.

   Regent Semmens moved ENDORSEMENT of Item l.

The motion was APPROVED unanimously on a 6-0 vote and signed by Chairman Roehm.

It was stated that this committee has had a very positive impact on the relationship between the legislature and MUS.  Regents Jasmin and Semmens believe that the continued formal discussions will generate even more understanding and good will.  They also noted that Deputy Commissioner Scott represented OCHE to the committee and ably gave expert testimony.

m.

It was agreed the Commissioner will coordinate legislative visits for the Regents.  He will attempt to keep visits as near the Regents' hometowns as possible, but to also include the Governor and her staff, Dave Gibson and Steve Snezek.  Commissioner Crofts reminded everyone that the Regents are not the only ones with a vested interest in this, but that the faculty, students and CEOs should also be involved.

Commissioner Crofts introduced Diane Fladmo from the Board of Public Education and thanked her for her attendance.  She in turn thanked the Commissioner for making time to attend BPE meetings.  It has been very helpful to them.  She noted that on Wednesday there will be a meeting of higher education, members of government, legislators and the Board of Public Education to work on a joint venture 5-year plan.

Chairman Roehm reminded the Board that the Board of Education meets on July 18 at 2:00 p.m.  There will be an attempt to reactivate committees for planning issues for citizens and all aspects of education.

n.

o.

p.

   Regent Hur moved ADOPTION of Item p.

   Regent Semmens offered a friendly AMENDMENT to Item 3, in the final line between the words "community" and "outreach" to insert the words "partnerships and" , in Item 4, the first bullet following the word "Need" to insert the words "and objectives", and finally to add a new bullet following the original second bullet to read "Partnerships with the private sector or other organizations (either to achieve the proposal or as a result of the proposal)"

   Regent Hur accepted the amendment.

  The Amendments offered by Regent Semmens were APPROVED unanimously on a 6-0 vote.

  The original motion FAILED on a 3-3 vote with Regents Thompson, Hamilton and Roehm dissenting.

The meeting recessed at 11:50 for lunch with student leadership followed by a meeting with faculty representatives. 

The meeting reconvened at 2:00 p.m.

Regent Jasmin recognized Pam Joehler who has been very supportive of MUS in her position with the Joint Subcommittee.  She is a Senior Fiscal Analyst with the Legislative Fiscal Division.

President Gamble read the following statement into the record:

We are saddened to report that Dr. Pamela Hill, Vice Provost for Outreach at Montana State University - Bozeman passed away this morning following a courageous battle against cancer.  Her energy,  enthusiasm and optimism will be sorely missed.  All who knew and worked with Pamela, admired, respected and loved her.  Higher Education in Montana will be diminished now by her absence.

Chairman Roehm requested the record reflect, and it be relayed to the family and friends of Pamela the Boards' deepest condolences and respect for her many accomplishments in the field of education.

CONSENT AGENDA Continued:

a.

ITEM 116-104-R0702 - Final Approval of New Procedures for Level I and Level II Items 

Level I Summary Sheet   New Guidelines  Level II Calendar

Regent Hamilton moved APPROVAL of Item a.

Regent Semmens indicated that this proposal was to streamline the process from three meetings to become more expeditious.  It appears to him that it has become a one meeting process and he questioned the amount of notice being provided to the public and other concerned parties.  It was agreed that when new program proposals are sent to the CAOs for approval they will be noticed in the Agenda by a memo similar to the Level I memo, thus ensuring adequate public notice.  Also included in the process will be the Community Colleges and the Colleges of Technology.

With these understandings, the motion was APPROVED unanimously on a 6-0 vote.

ACADEMIC/STUDENT AFFAIRS ITEMS

Action Items:

a.

Annual Diversity Report - Dr. Joyce Scott

b.

Level I Approvals (Informational Item Only)

CONSENT AGENDA Continued:

a.

ITEM 115-2007-R0502 - Approval of Long-Term Maintenance Plan; Montana State University-Bozeman  Attachment 1    Attachment 2

   Regent Jasmin moved APPROVAL of Item a.

An updated listing with dollar figures included was handed out to the Board.

Motion was APPROVED unanimously on a 6-0 vote.

b.

ITEM 115-2008-R0502 - Authorization to Transfer Certain General Operating Funds Exclusively for Future Scholarships and Stipends; Montana State University-Bozeman

In the past MSU has used vacancy savings for adjunct professors.  They request the authority to be able to transfer some of these funds into scholarships.

   Regent Jasmin moved APPROVAL of Item b.

  Motion was APPROVED unanimously on a 6-0 vote.

e.

Commissioner Crofts indicated the campus had worked on the concerns raised by his office on the inflationary issues in this lease and were now ready to present it to the Board.  However, he raised the issue of this item and three others from MSU and one from UM on the LRBP list these are the Lease, the Wiring, Gaines Hall and the new residence facility at UM.  With the special session at hand and the governor's office saying the MUS is not cutting anything, and some legislators commenting that the university system is bloated and is making no real cuts, it would be prudent to evaluate these items to be sure they are truly needed before proceeding forward.  In all four cases no money will be required from the general fund, but when standing before the legislature it is critical to know there is no choice but to move forward.  Both campuses indicated that was the case and these items did need to be done.  President Gamble asked Tom McCoy to hand out the latest changes to the Lease and Regent Roehm reminded all the campuses that it is very difficult to make quality decisions with last minute items thrust before them.  He asked the Commissioner if he would recommend the item as presented.  He indicated he would, but not with the comfort level that President Gamble has as he sees some risk in it with the CPI.

The annual rent of  $380,000 will be paid from IDCs and the added space will allow for more research generating more grants.  If the matching dollars through DOC are cut off it would impact other things on campus.  There would be changes to such things as smaller start up packages for new faculty.  However a good argument can be made that research and grant funding is a tremendous benefit to the state.  Tom McCoy indicated that at MSU the growth factor has been over 400% since 1991, and this year it is $68 million.  UM has the same type of growth.  MSU firmly believes that these prime researchers will be able to draw in a lot of money.

The only new change to the Lease is on page 3, item 5 which removes "3%" and leaves only "CPI".

   Regent Jasmin moved APPROVAL of Item e.

Motion was APPROVED unanimously on a 6-0 vote.

ADMINISTRATIVE/BUDGET ITEMS

Memo from Commissioner Crofts

a.

  Regent Semmens recused himself from action on this item since he had a conflict of interest.

President Dennison presented a letter from Mayor Kadas voicing his support for this item. 

   Regent Jasmin moved APPROVAL of Item a.

Motion was APPROVED unanimously on a 5-0 vote with Regent Semmens abstaining.

b.

ITEM 115-1502-RO502 - Approval of Proposal to Offer Access to Non-residents in Programs with Excess Capacity and All Canadians at a Rate of 150% of Resident Tuition; Montana Tech of The University of Montana  Approval of Proposal to Offer Access at 150 Percent of Resident Tuition in Programs with Excess Capacity to Non-Residents and Canadians from the Provinces of British Columbia, Alberta, and Saskatchewan to Students Meeting the Scholarship Requirements; Montana Tech of The University of Montana 

Regent Semmens thanked Montana Tech for providing the added detail requested by the Board.  Regent Hamilton inquired on the milestones that will be used to measure effectiveness.  Chancellor Gilmore indicated it had been discussed briefly, but all the details have not been written.  However, they will be looking to see how many students take advantage of this and what programs they utilize.  They will evaluate the cost involved and the revenue generated each year.

Regent Semmens requested a report at the end of the first year reflecting costs, quality of students and dollar benefits to campus and community.

   Regent Jasmin moved APPROVAL of Item b.

Motion was APPROVED unanimously on a 6-0 vote.

g.

ITEM 116-2802-R0702 Authorization to Offer Access to Canadians in Upper-Division Programs with Excess Capacity at a Rate of 150% of Resident Tuition; Montana State University-Northern

  Regent Jasmin moved APPROVAL of Item g.

Item g. was deferred to the September 19-20, 2002 meeting with the understanding that MSU-Northern will return with a Business Plan as required by the Board.

   Regent Jasmin WITHDREW his motion.

c.

   Regent Jasmin moved APPROVAL of Item c.

Motion was APPROVED unanimously on a 6-0 vote.

d.

  Regent Jasmin moved APPROVAL of Item d.

Motion was APPROVED unanimously on a 6-0 vote.

e.

   Regent Jasmin moved APPROVAL of Item e.

It was explained that the loan would be repaid with IDCs from federal grants with no impact on students.  None of those funds are pledged.

Motion was APPROVED unanimously on a 6-0 vote.

f.

ITEM 116-2801-R0702 - Purchase of Property, 1325 11th Avenue, Havre, MT;  Montana State University -Northern - This item supersedes previous Item #115-2802-R0502 which was approved by the Board of Regents in May 2002.

This item covers a different and less expensive home than the one approved in May and now rescinded.  There was considerable confusion among the Board and others regarding the source of funding for the original house. Two appraisals have been acquired on the new house averaging $274,000.  Commissioner Crofts indicated there was unrest and negative public reaction in Havre following the approval of the first house.  He stated further the purchase was portrayed as using the insurance proceeds with the balance being provided by a donor, when in actuality the money making up the difference was in a trust fund in the Foundation and had not been donated for this purpose.  He believed those two issues contributed to the decision to purchase the less expensive home represented in the new item. Regent Hamilton indicated she had spoken with the Foundation prior to coming to this meeting, and they indicated that the donor of the trust funds mentioned at the last meeting was willing to redirect them at death to the purchase of the first house.  The second house is currently being leased and it will transfer to MSU-Northern rather than remain with the Foundation.  The Foundation is willing to accept $50,000 less than the appraisal so that the insurance proceeds will cover the entire cost.  Discussion ensued regarding the willingness of the Board to accept only one appraisal on the first house since it appeared it would cost MUS nothing over and above the insurance proceeds.  Chief Legal Counsel LeRoy Schramm indicated to the Board that if they felt they had adequate information at this time, they needed to make their decision.  Regent Semmens indicated he only wanted it clarified that there would be no supplemental dollars and no donor involved in this purchase.  Roger Barber indicated it was solely insurance proceeds that would be used for this house.

   Regent Jasmin moved APPROVAL of Item f.

Motion was APPROVED on a 5-1 vote with Chairman Roehm dissenting.

Regent Hamilton requested that a Business Plan format be added to the Tuition Policy Committee agenda.

It was announced that past-President Kettner was unable to attend this meeting due to surgery.

q.

r.

s.

t.

Regent Roehm asked the Board to keep their red handbooks in front of them at every meeting.  In the front is the Strategic Plan which the Regents are encouraged to follow in making their decisions.

He requested that all of the recommendations for membership on the Tuition Policy Committee be given to him by tomorrow morning.

Steve Snezek, Energy and Higher Education Policy Advisor to the Governor stated the Governor sends her best and wished she could be at the meeting.  He noted that Montana is going through tough economic times and the Regents are in an unenviable position of maintaining quality at a good price.  He thanked the Regents for their work with the Governor's office and Dave Gibson and Desiree Taggart.  The meetings of the Legislative Interim Subcommittee on Post-Secondary Education helped them to recognize the role MUS plays in economic development in Montana.  It was not noted in the past, but from now on will be.  He thanked in particular Regents Jasmin and Semmens for their participation on the PEPB and commented that this type of formal discussion had not happened in the past.  The Governor hopes it will continue in the same format or perhaps another. 

The meeting recessed at 4:35 p.m.

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SYSTEM ISSUES Continued:

At the May 23-24, 2002 meeting the Commissioner was requested to consult with other groups to determine what programs might be available to address the teacher shortage in Montana.  K-12 had more than a dozen proposals before the last Legislative Session addressing this issue.  All but one failed, and the one that passed had no funding.  They wanted to focus on two items this session: 1) loan repayment program; 2) significantly improved retirement program for teachers, which Commissioner Crofts advised against due to the high price tag.  His recommendation is to focus on the loan repayment program and they will request $1.2 million in the upcoming biennium for it.  He noted that in the Budget Initiatives Billings and Northern are trying to take the Teacher education programs to place-bound students in northern and eastern Montana.  Those students are not likely to leave Montana after graduation.

Regent Roehm indicated that Commissioner Crofts will be a member of the Tuition Policy Committee.

Commissioner Crofts requested the concurrence of the Board on the draft format of the bi-monthly newsletter.  Each issue will have a message from the Chair, with highlights on items of interest to the public, and the back would have data covering different issues such as enrollment growth in two-year degrees.  He requested input for a list of recipients of the newsletters, and suggested legislators, businesses, and stakeholders to be identified.  University Relations officers are working on pulling together a list.  The newsletter will also be available electronically.

DISCUSSION WITH CAMPUS CEOs/COMMISSIONER

Please See Attached Reports

Chancellor Sexton announced they received a $5 million Talent Search Grant.

Chancellor Gilmore made drawings of the proposed entry arch available to those interested.

a.  

Discussion of Goals and Objectives

Commissioner Crofts added two items to his goals and objectives:  Continuation of what was in last year's goals on continued efforts with the Executive and Legislative Branches, and to take the lead ensuring all campuses are pursuing economic development opportunities.

The Board accepted the two additions and approved the goals and objectives for this year for the Commissioner and the two Presidents.

Regent Roehm announced the next Board meeting will be held in Butte on September 19-20, 2002.

Janie Park announced that John Cech has been hired replacing Bob Carr as Dean of the College of Technology in Billings.

Regent Roehm announced that the Board was going to meet for the purpose of reviewing Senior Management Evaluations.  It was his determination that the demands of individual privacy exceeded the merits of public disclosure with regard to these matters and therefore closed that portion of the meeting as allowed by MCA 2-3-203.

The meeting recessed for Executive Session at 9:15 a.m.

With no further business to come before the Board, the meeting adjourned at 11:05 a.m.

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