BOR Minutes: November 17-19, 2004

The Committee convened at 10:10 a.m.

Members Present:            Regent John Mercer, Regent Mark Semmens Chair, Regent Lila Taylor, and Rod Sundsted

Associate Commissioner Rod Sundsted provided an overview of the operating budgets, indicating that included in the operating budgets, were six months of the annualized cost of the salary increase, adjustments for MAP, and projected utilities costs.  The Executive Budget incorporated 6% for utility increases, however if inflation exceeds that, there will be $1.7 to distribute statewide for utilities.  Each agency will receive a proportional share.  Mr. Sundsted said the budget included factors for present law adjustments, a 2.5% general increase for inflation in general operating costs, and 3.3% for O&M.  There are special base increases in the high school Honors Scholarships, and fee waivers.  The Governors proposal includes an increase for retirements, with 1.2% this biennium for TRS, and .67% for PERS.  Items not included in the Governor�s budget will be in a separate bill.  After discussion with the Governor�s office, Mr. Sundsted recalculated the revenue, as well as the Allocation Model as directed by the Board, and adjusted for 05-06 enrollment.  There was discussion about the possibility of the new administration changing the Governor�s budget and the effects that might have on tuition.  Also discussed were the initiatives proposed by the campuses in light of the initiatives the Governor�s office had funded for Shared Leadership for a Stronger Montana Economy.  Regent Mercer noted the campus initiatives will be funded completely by tuition, the pay plan is still in the air as is the Allocation Model, and wondered if these needed to be fixed before the budget could be finalized.  Chair Semmens added it would be helpful to include a commentary on what led to the initiatives.

There was discussion of the drop in enrollment at the various campuses, with MSU-Northern suffering a significant decrease.  Much of this is due to a realized decline that was projected in high school enrollments.  On the Hi-line, the problem is so severe they have dropped football.  Another part of the problem is the increase in tuition, which makes it difficult for many Montana families, as well as those in the surrounding states to afford higher education.  Over the last few years, there has been a steady decrease in the number of high school students taking the ACT.  It is not clear if they intend to go to the two-year campuses or the colleges of technology and believe they don�t need the ACT, if they cannot afford the tuition for higher education, or if those two issues have combined with the downturn in high school enrollments.  Campuses plan to do targeted marketing to areas of the country that find the tuition in Montana a bargain.

Following discussion of a variety of proposed initiatives, the meeting suspended for a presentation by the Bio-Science Alliance.

Meeting suspended at 11:15 a.m. at which time Regents French, Roehm, Hamilton and Foster arrived for the presentation.

The meeting suspended at 11:45 a.m. for a lunch meeting with Leadership Montana. 

A presentation on Shared Leadership for a Stronger Montana Economy was made to Leadership Montana at 12:45 p.m.

Chair Semmens explained that at their retreat in October, the Board had discussed the substance of the Allocation Model, which was initiated nine or ten years ago.  With changes in the economic environment, it was time to reevaluate the model.  It had been agreed that an outside facilitator should be brought in to present the best practices and help the Board avoid reinventing the wheel.  This process will not be done in a matter of months, but the new allocation model should be ready to use for the 06-07 biennium.  The model will be tweaked for this biennium to adjust some of the inequities, and the Board had asked the campus Presidents to present their plans for reallocation.  Since the approaches were distinctly different, it was decided the differences should be dealt with at the system level.  Chair Semmens said the goal of the day was to examine the manner in which funds are allocated, and decide how to made the near-term tweak.  If sufficient time was available the committee would also discuss some of the objectives that needed to be addressed.

Associate Commissioner Sundsted gave a quick overview of the model.  It was hoped to do away with the transfers from the flagship campuses to their smaller campuses and make the change in funding at the Board level.  He stated that state funding should allow the smaller campuses to succeed, but not at the expense of the other campuses.  Since the inception of the model, many major changes have occurred with the ratio of tuition to state funding being a dramatic example.  Other sources of revenue at the flagship campuses have not been added into the model, with one of those being the increased revenue for non-resident students as compared to residents.  He explained there needs to be a long-term solution, but today they would only look at a fix for the next two years.  Mr. Sundsted said one option would be to assume all of the revenue that is generated, and then reallocate it back out.  However, he did not recommend this for a variety of reasons.  Another option was to expect that some contribute a greater percentage of the cost of education than others do.  He presented several variations on the use of non-resident incremental tuition with the campus generating the revenue retaining from 70% to 85% and the balance being reallocated to the other three campuses relative to their total spending on resident students.  A third option would be incremental with an expectation of reasonable tuition increases, adjustment of both millage and state funding to reach the cost of education.  Chair Semmens indicated that focusing on non-resident tuition could be a near term solution, but the long term is much broader.  He indicated he wanted the tweaking to be something clear, identifiable and easy to deal with.  He indicated that in aggregate for the system, there is $15M in non-resident tuition in excess of the cost of education.  These dollars are not included in the model.  Referring to the handout, he showed that the expenditures at the Helena College of Technology and the Great Falls College of Technology are the same, but the tuition in Great Falls is higher than Helena.  Chair Semmens said the campus that generates non-resident excess revenue deserves the lion�s share.  As an example, Bozeman generates $7.3M in non-resident incremental tuition and with an 80-20 split, they would retain $5.84M and would have $1.46M to redistribute.  This would be a redistribution of state dollars, not tuition dollars in the Allocation Model.  These revenues should not be ignored in the model.

Regent Mercer indicated focusing on adjusting the state support based on non-resident tuition might be the wrong way to go.  The lump of state funds should be allocated in a way to run each campus.  With those funds allocated, each campus should live or die on its ability to attract non-state dollars.  He believes that campuses that attract non-resident students need to teach those students.  If the enrollment drops at MSU-Northern it doesn�t make sense to pour in more money, but have the legislature fund it to keep it in business because it is a big economic engine on the Hi-line.  If that fails, they will need to charge more tuition to cover operating costs, or look to the local taxpayers to help support it.  Regent Mercer indicated that if they follow the path of using non-resident subsidies they will build a transfer into the system because the campus that generates more non-resident students will receive less state support.  He said they should use Chair Semmens skills to analyze the cost of providing what they do now, and then allocate state funds in the fairest way possible and let each campus flourish or adjust.  The Board should then argue to the legislature that they have long-term concerns about the viability of certain campuses, and if they are to continue, it will cost the state a certain amount to maintain these critical economic elements in the state.  Although the transfers were ingenious ways to keep the smaller campuses going, in the long term it will be the downfall.  He indicated he was committed to support Chair Semmens in the short run, but worried about masking problems in the system.  Regent Mercer believes the whole system will be brought down if they try to mask problems on campuses with financial difficulties.

Chair Semmens stated there are a whole host of issues that need to be addressed, and this was not for the long term, but the short-term tweak.  These are logical dollars to consider in making transfers since they are dealing with scarce resources.  He fully appreciates and recognizes the incentive for campuses to bring in non-resident students, and does not want to remove that.  This is a short-term fix, which will cost about $1.5M for UM, and more at MSU.  President Dennison indicated his major concern was to do this for the short term, and then follow up with a sophisticated evaluation of how the model works.  In essence, it is a decision of what outcome is desired and then using the numbers to make it happen.  He believes it would be better to go through what the allocation model now provides, and then take into consideration the differences by campus and program.  This should show that the cost of education formula requires a certain amount of tuition, and one size does not fill all.  In the short term, he prefers to go that way, but supports the cost of education revision over whatever time it takes to bring it close to the position of the Chairman.  He encouraged them to find that number, make the decision, and adjust tuition accordingly.  He hopes the state recognizes that some campuses need more support.  On another point, President Dennison reminded the committee that the current process requires each university to make recommendations to the Board on how the dollars should be allocated based on what each campus needs to be viable.  They also make recommendations on tuition.  The Board decides both.  He takes responsibility for all four UM campuses and is concerned about the well being of each.  However, it would be nice to get to the point where state support will keep the doors open.

Chair Semmens indicated the tuition policy is a key part of the issue.  President Gamble stated the market has to determine what is charged.  Chair Semmens said the slight adjustment has nothing to do with what the market will bear.  What used to be fair is now not equitable, but he does not advocate one size for all.

Regent Foster said they had identified an interest factor of the non-resident tuition playing a different role than ten years ago.  The piece should not be thrown away.  He also said that in Montana markets are not as clean as one would like.  Life situations are different around the smaller units, with many being place bound and unable to choose another institution where the tuition is lower.

     Chair Semmens indicated no decisions would be made that day, but he wanted the campuses to look at the issues and share their thoughts with the Board.  Mr. Sundsted noted the need to decide on the adjustment mechanism they wanted to use with the current model for the 06-07 biennium if transfers are necessary.  They could use their own discretion, or it could be formulaic but the campuses needed guidance to complete their current budgets.  He favored the four campuses working to see what would best fit their needs, but the committee could decide what the amount should be, and how it should be distributed.  Regent Mercer asked if Mr. Sundsted had concerns about the difference in transfers between the two sides of the system and if the Board should be concerned.  He also asked if the budgets, tuitions, and allocation model could be ready by January for the legislature.  Mr. Sundsted indicated he does have concern about the different approaches to the transfer of funds to the smaller campuses.  He indicated they could discuss strategic tuition for residents, but state funding drives the model.  The Regents need to make decisions on tuition, and let that drive the allocation model and how they deal with transfers.  As far as finalizing by January, he believed they would probably need to have a conference call meeting before the January meeting.  Chair Semmens recommended the CEOs provide their feedback, and the Budget Committee needs to meet again in December to give further guidance to staff for their recommendations at the January Board meeting.  He indicated that Mr. Sundsted, Commissioner Stearns and he would work on a schedule for the meeting.  Regent Hamilton asked the Budget Committee to refer to the Tuition Committee Report which was adopted by the Board.  Chair Semmens agreed.

Following a ten-minute break, the Committee reconvened at 4:00 p.m.

Chancellor Capdeville of MSU-Northern reported they are hoping to regain grants for Native American students, and they are concentrating on areas in which they can grow.  Based on their investments they are looking statewide at the trades such as plumbing, electricians, pipefitters, as well as increased teacher education in industrial education.  Retention remains an issue at Northern and at orientation they have focused on the two year school and the technical sciences, nursing and the opportunities in the graduation rate.  The advising center has made a difference.  There is a cost to staying abreast with the technical sciences.  They now have a two-year program with Caterpillar called �Think Big� which brings training to Northern and tailors it to Caterpillar needs.  Chancellor Capdeville indicated they need to reinvest in their recruitment initiatives and enhance quality issues.  They have seen some growth in the Great Falls program and plan to do more with the Great Falls College of Technology.  He believes that MSU-Northern could benefit the state further if they could bring in more Canadian students, and suggested that perhaps the 50% reduction wasn�t enough.  The Native American fee waivers also are up this year at their campus.

To demonstrate the commitment of the Board, Regent Mercer suggested the possibility of the Board making part of the match on new initiatives by taking funds from the lump.  Chair Semmens said another alternative for the proposals on facilities and infrastructures would be the use of the very low short-term rates available in the Bond market.  The individual items are too small to consider alone, but as a group it would be worthwhile to pursue.  Rod Sundsted reminded the Board these budgets had been prepared before the Executive Budget was released, and there may be some adjustments made.

Dean Mary Moe reminded the Committee that it would be wise to purchase the portion of land retained by the school district when the College of Technology purchased their current plot.  If they don�t take title to the remainder, they will become landlocked.  Dean Moe suggested an inter-cap loan might be the best way to purchase the land over a ten year period at about $38,000 a year.

President Dennison indicated he preferred the percentage increase in tuition rather than the flat increase.  Chair Semmens noted that the non-resident tuition revenue at UM is $11.7 mil compared to Bozeman at $13 mil.  President Dennison said they believe these numbers will work.  He said that if there is indeed $5M available for equipment, they would find a match for each of his three colleges of technology.

Chancellor Gilmore indicated there was only one new initiative on their list, and that was the Capital Campaign.  After reviewing their initiatives, Chair Semmens commented there is room for further tuition increases at Montana Tech.

Chancellor Storey reported they needed to assure sustainability and do things around enrollment management, and therefore needed someone in marketing at Western.  Chair Semmens asked if the increased enrollment in freshmen was being maintained, and Chancellor Storey said that so far yes, but they would have a better idea in the spring.

President Dennison reported for Helena College of Technology indicating the reallocation of funds occurred after the 05 budget was put together.  $96,000 was being expended for faculty salaries, and the only additional initiative was a pool for anticipated faculty retirements.  The projection is on a 4% tuition increase including salary increases.  Although money for equipment was not included, there is a need for it, and they intend to get what they can for the campus equipment needs.

Chair Semmens indicated the campuses will now proceed to make further refinements with reference to the executive budget.  Rod Sundsted said this all goes hand in hand with the allocation model, and they will then get tuition recommendations from the campuses.

The Budget and Audit Oversight Committee adjourned at 4:55 p.m.

Please see the Attached Minutes

The Staff and Compensation Committee convened at 5:15 p.m.

Committee Members Present:  Regent John Mercer, Chairman; Regent Richard Roehm; Regent Mark Semmens

Also Present:  Commissioner Sheila Stearns, Assoc. Commissioner Rod Sundsted

OCHE Staff to the Committee:  Kathy Crego

Agenda Items and actions:

Discussion:  Committee members indicated the proposed guidelines are a good �first step� in establishing system-wide parameters.  Chairman Mercer stated his concern that the procedures are ambiguous and still allow for some degree of misuse and/or inconsistent application.  Chairman Mercer also noted that, as presented, an equity-based salary adjustment is limited to situations where inequity results from paying a higher salary to a newly hired employee.  The procedures should include equity comparisons to incumbents as well as newly hired employees.

Action: With the above-noted change to eliminate the reference to �newly hired employees,� Regent Semmens made a motion and the committee unanimously approved the procedures to be referred to the full Board at the January, 2005 meeting.

1.       Item Related to #1:  In response to a campus request, a section addressing lump sum bonuses was added to the �Salary Increases Under Exceptional Circumstances� proposal.  The Lump Sum Bonus language was presented for discussion purposes.

Discussion: Regent Roehm stated his opposition to lump sum bonuses.  Committee members requested that additional information be provided regarding potential impact of lump sum bonuses, along with other relevant information.

Action: Staff will provide additional information to the committee for discussion at the January 2005 meeting.

2.       Item:  MUS Wellness Program strategy

Discussion:  Glen Leavitt, Director of Benefits, OCHE, presented a system-wide strategy to expand wellness programs and provide a consistent level of service to all campuses.  The strategy, approved by the Inter-Unit Benefits Committee, will model national approaches and will progress through various levels as funding and support is available.  

Action: No formal action is required of the Board of Regents.  The item was discussed to ensure committee concurrence with the direction being taken by the IUBC.  Committee members indicated their unanimous support.

3.       Item:  Multiple year contracts for non-tenure track faculty.

Discussion: Multi-year contracts for non-tenure track faculty are precluded by BoR policy.  MSU-Bozeman requested consideration of an exception to or modification of the relevant policy to allow implementation of a trial program that would allow hiring non-tenure track faculty for a maximum of three years.  The purpose of multi-year contracts is to improve recruitment of highly qualified faculty.  

Provost Dooley, MSU-Bozeman, explained the intent that multi-year contracts would be used on an extremely limited basis only when there is a �compelling quality argument.� 

Regent Roehm shared his concerns that the employment of non-tenure track not be expanded to the detriment of employing tenure track faculty members.  Regent Semmens stated that this approach could raise new pressures relative to questions regarding different employment conditions for non-tenure track faculty members.  Chairman Mercer recommended, and other regents agreed, that any trial program and policy modification approved should be extended to all campuses where collective bargaining does not prohibit such change.

Action:Provost Dooley will work with OCHE staff to establish criteria and clear definitions.  OCHE staff will also survey other institutions to determine standard practices relative to multi-year contracts for faculty, as well as coaches and administrators.  The item will be revisited at the January 2005 committee meeting.

Minutes completed and submitted by:  Kathy L. Crego

The Staff and Compensation Committee adjourned at 6:00 p.m.

8:00 a.m.      Full Board Convenes 

ROLL CALL

APPROVAL OF MINUTES

SYSTEM ISSUES

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Reports on progress of security issues on the Missoula and Bozeman campuses were given.  Chair Mercer indicated it should be system wide, rather than the two main campuses alone, with a certification from administrators that specific issues have been addressed on all the campuses.  He asked if there was a procedure for that.  Commissioner Stearns indicated they could probably have been clearer in their instructions to the CEOs, and asked if the Chancellors would be able to give their reports at the next meeting.  Regent Hamilton indicated that would be acceptable.  Chancellor Sexton reported they have identified their areas of concern, and they are not satisfied.  In their budget presentation there is an item for cameras and lighting.  They have campus committees that identify problem areas, and now have cameras in selected spots, but those will be expanded.  Additional lighting will also be installed.  The Chief of Security will do training with RAs on proper conduct, and what to do and what not to do.  They are attempting to work through this issue in Billings.  Regent Hamilton asked if in light of their expanding interest in research, Chancellor Sexton felt confident they could provide safeguards and meet federal requirements.  He responded that it would be an issue as the research role is expanded.  Currently they cooperate with the hospitals, and they will build from those programs.  He believes they are on track, but each issue will be addressed as they proceed.  Chair Mercer asked if there was a chain of command that checked on him to review the issues, or if that was left entirely to Chancellor Sexton.  Chancellor Sexton replied they share, but they could do a better job.  He indicated he relied on Bozeman to help them with issues they experience and Billings doesn�t.  Regent Hamilton indicated expertise shared by the larger institutions was one of her issues, and she wanted to see a lead person to be sure that all policies are in place and followed.  Chancellor Capdeville reported they have an issue in the science/chemistry area, and Bozeman did help them to address those extensive issues.  Although they have tried to address the lack of sprinklers in the dorm, they have no money to follow through.  Last year they hired a new person who had experience at Bozeman to work with the RAs and there has been improvement.  There are no cameras on the Northern campus, and they do have potential issues.  Dean Moe stated that with no resident students on campus, their situation is a little easier, but with fewer resources, some of their challenges are greater.  They have installed heat sensors and eliminated keys, and faculty cannot get in after hours.  The heat sensors in the buildings set off alarms which bring the police.  They have requested camera and lights in the parking lot, but anyone is worried about walking in the dark, they have been advised to ask for an escort.

President Dennison handed out a document on proposed security enhancements at The University of Montana.  The last page is a map of where the cameras and new lighting will be located.  Closed circuit TVs on campus will only be used in case there is an incident, and after 90 days, the data will be discarded.  Concerns of privacy have been resolved and it will cost the campus $125,000 to install.  He indicated UM complies with all the federal requirements, and they collaborate across the campuses.  Currently a large emergency response plan is being reviewed, looking at such issues as the necessity to evacuate the entire campus, and they are well coordinated with the state, county and federal personnel.  Ken Willett of Campus Safety is heavily involved with FEMA and Homeland Security.  Chancellor Storey indicated they are concerned about safety for staff, faculty, students and families at UM-Western.  There are different challenges for the smaller campuses.  In Dillon, they have a great working relationship with law enforcement.  There were a few incidents which precipitated the installation of lights about five years ago.  There is an escort service on the campus, they have hired a security service, and there is training for the RAs.  Police have keys to the dorms in case of emergency.  There are few cameras on campus since the students did not want them.  He reported that fire safety has greatly improved.  Chancellor Gilmore indicated that Montana Tech is the only institution in the Pacific Northwest with a safety and hygiene program, and they hired Marilyn Cameron,one of their own graduates, as Coordinator of Environmental Health and Safety.  She garnered a grant to set up an emergency response team, with 30 hours of training and the equipment is now in place.  One issue over which the campus has no control is that Park Street is a public street that splits the campus, and they have been unable to get the county to patrol the street.  On occasion vehicles drive through at 50 mph in a 15 mph zone.  One student was hit early one morning.  Chancellor Gilmore reported he is reviewing a recently completed study to improve safety on Park.  All students are required to be trained before they are allowed to go into any lab on campus.  Marilyn Cameron stays updated on the training, which can be done on-line, they have fire drills in the residence halls, and Chancellor Gilmore clarified that Prospector Hall does not have sprinklers at this time.  They are researching the cost to correct this issue.  They are somewhat concerned about the lighting on campus, they have two emergency phones outside on campus, and inside all the buildings.  There was discussion that perhaps cell phones make this item less necessary.  Regent Semmens said it would be helpful for the heads of security across the system to get together once a year with outside resources to discuss issues and best practices.

President Hammon of Miles Community College reported they recently built new student housing which has security included and sprinklers.  There is no security on campus, but the local police are often on campus since they use the facility to exercise.  The Safety Committee includes students, and they review the challenges.  A safety plan is being developed for the campus, and it will include cameras.  Representatives from Homeland Security visited and talked about hot spots they should review.  Facilities personnel have been provided with two-way radios, and they have just completed a lighting project on campus.  President Hammon indicated they have no major challenges, but many students were bringing guns on the campus because many are hunters.  The guns are not allowed in the rooms, and they have dealt with this issue.  Although Miles Community College does not collaborate with the system on security issues, but MSU-Billings has helped them.  President Terry Hetrick indicated the main concern at Dawson Community College is the separation of the student housing from the main campus due to the local terrain.  They are analyzing new ways to enhance the safety of the dorms.  Since they are a two-year school, they lose their RAs every two years and then need to retrain replacements.  President Hetrick reported the main campus has no problems, but they are always looking for improvements.  President Jane Karas reported they have a Safety and Crisis Management Team at Flathead Valley Community College.  They developed a plan over the last two years, which has been reviewed by their Board and the police department.  They have also hired a full time safety officer and they work with law enforcement and the fire department.  Police are on the campus on regular patrols.  Custodians have been supplied with cell phones and a code number, but there is no communication between the buildings and classrooms.  Regent Hamilton indicated it was important to consider the kinds of students on campus, and the academic and home environments in which they were raised.  Low income, first generation college students have no cell phones, but beyond safety and security are the drug and alcohol problems that lead to trouble for others on campus.  She asked that the Student Affairs Officers get together to be sure all are working toward what is best for all students, and to include Community College input and parental input.  Regent Roehm also requested that the colleges of technology and Helena be included.

Student leaders each gave a brief update of what they see emerging in the area of safety on their own campuses.  Barbara Yahveh reported the biggest issue at the Helena College of Technology is the separation of buildings.  The lighting is inconsistent.  They did have an issue with classroom disruption by inappropriate behavior of a student.  They have developed their emergency action plan with The University of Montana campuses.  They have a .5 FTE facility person that helps with it.  Officials from UM visit the Helena campus looking at safety issues such as the airport campus air ventilation issues, and UM has always helped them with these problems.  Faculty can only be on campus during certain hours or the alarms go off.  Dean Paul Williamson of the Missoula College of Technology indicated they work closely with the UM security people who include the COT in their regular night rounds.  They have good lighting, but as they push for more evening and weekend classes, the lighting will continue to be upgraded.  They have no worries about student security since they are so well coordinated with UM security, but they are concerned about the physical safety of Fort Missoula.  Chancellor Gilmore reported they have some concerns for student safety at the Butte College of Technology, but not for property.  There is an issue of access for students when the campus is not open.  They house students, but the facility is locked down after classes, which limits student access.  They have installed a new alarm and fire system.  Chancellor Sexton said they are addressing a number of issues at the college of technology in Billings including lighting, cameras, and the addition of a new person to campus security who will be primarily for the College of Technology.  With the expansion into evening and weekend classes, they will require more people, expanded parking, and better lighting and monitoring.

Chair Mercer said they needed to get a motion on the table to take action on the missing sprinklers in the dorms, the coordination issue, and the speeding at the Butte campus.  He suggested perhaps they could get joint control of Park Street.

 Regent Semmens moved to request the campuses to identify their priority security and safety needs and to identify the estimated costs of those needs, and provide this information to the Commissioner.  Second, to direct the Commissioner to coordinate with the campuses for all campus safety people to meet for half a day to discuss best practices. 

  Regent Hamilton added that there should be three areas in the Motion; 1) federal requirements; 2) facilities issues such as lights and sprinklers, with a system wide perspective for consistency; and 3) student services programs that address a variety of problems students have as the circumstances change.  This is all one proposal.

Regent Hamilton indicated the Budget and Audit Oversight Committee could look at the cost.  Chair Mercer said the concept of best practices does not mean that cameras must be imposed on campuses where they are not necessary.

  Motion by both Regent Semmens and Hamilton were approved unanimously on 7-0 vote

a.

The Board took a ten-minute break and reconvened at 10:00 a.m.

Ray Ford and Mark Sheehan gave an overview of the status of IT system wide.  Please refer to the presentation included with the Agenda.

Regent Roehm proposed to the Board consideration of a System Research position for the Office of the Commissioner.  The Commissioner�s Office, and hence the Regents do not have the capacity to monitor/evaluate the impact of their decisions or policies; or in general, to monitor the health of higher education in Montana.  He explained they have the capacity to account for what is done or spent, but are not able to evaluate the quality or appropriateness of what they get for these activities or expenditures.  He would like this position to be able to query various internal and external data and human resources to create information important to the management and leadership of the System.  It will require both data management support and a close working relationship with the institutional research functions at UM, MSU and other campuses. 

  Regent Roehm Moved for approval to create an institutional research function in the Office of the Commissioner which would not be a clerical or data processing position, nor entry level or several layers below the Commissioner.  This position would be analytical and would query data to create reports of use in management of the MUS.

Chair Mercer indicated this was a compelling argument, and that it also fits with Shared Leadership.  He asked the Commissioner to research the position and present a detailed proposal to the Staff and Compensation Committee.

  It was the consensus of the Board to proceed with this proposal

Chair Mercer indicated the Board should explore going into the 21st century with WEB based meetings.  Ray Ford said the Faculty Senate meetings are WEB based and they would be glad to demonstrate it to the Board.  Mark Sheehan said that what UM is doing eclipses his example, and indicated they could coordinate.  Rod Sundsted noted that IT is an area of great concern because OCHE has little knowledge in that area and depends on Ray Ford and Mark Sheehan for their help.  He said they are always ready to help and never go against each other.

a.

SYSTEM ISSUES continued

Regent Hamilton reported that OCHE had received the official termination of their lease.  The Lease states that SAF can terminate the lease with a twelve-month notice.  Since SAF is growing rapidly with new opportunities outside Montana, they have been working for months to identify alternatives, but have been unsuccessful.  Space is a critical issue, and the SAF Board voted to terminate the Lease held by OCHE.  Commissioner Stearns indicated the cancellation grants OCHE twelve months to find other quarters, and would give an additional six months on a month-by-month extension beyond that to look at other opportunities.  Rod Sundsted reported he had looked at a lot of space in Helena, but it has been difficult to find the right fit.  One option would be to build to lease, and they need to enter into a commitment soon.  State standards won�t enter into the lease if it is less than ten years.  He indicated they will need to move quickly when they do find a solution.  Regent Roehm asked why they could not locate some place other than Helena, since property is expensive in the capital.  He suggested that Miles City had a whole building available.  Chair Mercer said that people who work for the Commissioner live in Helena and don�t want to move.  He stated it seems like MUS is being taken for granted in Helena where it is a seller�s market.  He believes that many communities around the state would welcome the MUS with open arms, and would like to see that pointed out to those in Helena.  Rod Sundsted said it is not so much the cost as the space itself.  He indicated he might pick up and move, but they would probably have to replace most of staff, which would be costly.

DISCUSSION WITH CAMPUS CEOs  

          (President Dennison, President Hammon, Dean Paul Williamson, Dean Jeffrey Jacobson)

Over the course of several meetings, all of the CEOs, on a rotating basis, will have an opportunity to talk with the Board about important higher education issues, trends and directions, and concerns related to their campuses.  The Commissioner will determine the rotation.

Also note attached reports from all campuses.

President Dennison presented the new issue of "Montana Invests" which provides succinct information on the areas of economic impact in the state by the Montana University System.  He said he hopes in the future to be able to provide the dollar amount generated in taxes, although it will be a complicated undertaking.  Regent Semmens added that although difficult to track, it would be meaningful to show the expenditures of businesses that are dependent on university research.

President Hammon indicated he would like information on how auditors are selected for the community colleges.  He also reported their nursing program is going well.

Dean Paul Williamson reported the enrollment at the Missoula College of Technology campus increased more than 35% over the past three years.

Regent Hamilton indicated she would appreciate a Two Year Education Task Force update on such issues as vocational education, transfer programs, and mission driven courses.  Chair Mercer recommended that the Academic/Student Affairs Committee should look at that.

END DISCUSSION WITH CAMPUS CEO's

The Board recessed at 12:04 for lunch

The Board reconvened at 1:35 p.m.

a.

Regent Hamilton reported that Deputy Commissioner Barber had provided an update to the Committee on projects such as the LPN common curriculum transfer, and the policy on honorary degrees.  The LPN directors will pursue a common curriculum and Jim Rimpau and Bill Muse have offered to work with Roger Barber to develop quality benchmarks and issues.  The data project was discussed and the Board will meet with Jay Pfeiffer at the January Board meeting on this issue.  If at all possible, recommendations to make transfer of records throughout the system seamless will be presented to the Board at the March, 2005 meeting.  The tribal and community colleges also will be involved in this work.  A proposal for fewer and shorter Board meetings is being reviewed, with discussion on how to restructure the meetings, and revise the meeting schedule.  It was requested that committee meetings not overlap since people from the smaller campuses generally wear two or more hats.  It was also recommended that a summary sheet on Level II items be provided.  The Committee believes better data is needed in the proposals.  Regent Hamilton indicated that Montana is one of the few states where certificates are approved at the Board level.  The committee requested the CAOs to look at this issue and bring proposals for change to the Board.

Chair Mercer asked about the overlap of committee meetings.  Regent Hamilton indicated concerns were expressed by external stakeholders in regard to information and notification on Academic issues.  The original notification is now in the Level II memo in the Consent portion of the Agenda and this can be problematic for external people who may not know to look in the Consent Agenda for these items.  Commissioner Stearns noted the task on changing the meeting schedule is to fit in and work out the committee meetings.  Chair Mercer indicated this is a difficult issue, and the Board committees used to meet at the same time but now they don�t wish to do so.  He indicated he had envisioned the committees meeting at the same time on Wednesday in small groups, but if they have to meet at different times, the Board may as well sit as a Board and deal with the proposals.  Regent Hamilton indicated the Board had moved to a much more management-oriented level which created a problem for the managers, who need to be at both committees.  She said information is power, and if a staff member is not at a meeting, they are out of the loop.  Regent Hamilton believes this is an issue they can handle, and perhaps they could organize the committee work for more efficiency.  Regent Roehm reminded the Board that had gone to four committees rather than two, and the Board of Education also has four committees.  He believes it has become a complicated problem.  Regent Semmens believed it was a simple solution of having one committee meet from 2:00 - 4:00 and the other from 3:00 � 5:00.  Regent Foster said that the Workforce Development Committee did not meet this time, and he thinks they need to take care of issues in a shorter time frame.  He suggested those meetings could be 8:00�10:00 Wednesday morning so the committee members could then attend the other committee meetings.  Chair Mercer asked what the Board wanted to accomplish with committees.  If there are problems, they should be brought to the committee to be addressed.  Meeting at the same time is more efficient for the Board.  Regent French also requested consideration of the students who would like to attend the Academic Student Affairs committee meetings.  Chair Mercer recommended giving thought to this issue, then for the Chairs to work with the Commissioner on the scheduling.  He recommended the campuses also weigh in on this issue with the Commissioner. It can be reconsidered after that.

END ACADEMIC/STUDENT AFFAIRS ITEMS

ADMINISTRATIVE/BUDGET ITEMS

a.

Regent Semmens gave an overview of the committee meeting, indicating the necessity of a 3% increase in tuition to maintain the current level of quality with all new variables figured in.  Additional initiatives proposed by the campuses would also be helpful.  The tuition impact for these initiatives will not be uniform across the system.  The Budget and Audit Oversight Committee will meet again during December, and the campuses will bring firm recommendations to the Board at the January, 2005 meeting.  Chair Mercer asked if all the committee agenda materials were sent to the entire Board.  Regent Hamilton indicated she did not receive the Agenda materials for the Budget Committee until Monday, which made it difficult for her to review them properly before the meeting.  Regent Semmens indicated the delay in distribution of the Agenda at this meeting was due to the Executive Budget coming in right before the Board meeting.  He said that in the future the Agenda can be provided beforehand.

Item b. was deferred to Friday morning to allow David Ewer, Governor-elect Schweitzer�s Budget Director to be present.

Chair Mercer introduced Lt. Governor-elect John Bohlinger who arrived at the meeting.

The Board recessed for a ten minute break and reconvened at 2:50 p.m.

Staff Items:

a.

Labor Agreements/Other  All Items from Kathy Crego

a.

Academic Items   All Items from Roger Barber

a.

Level II Memo (Presented to the CAOs at this meeting)

FRIDAY, November 19, 2004

Open Forum for Public Input on MONTANA UNIVERSITY SYSTEM ISSUES

MCA 2-3-103. Public participation ...The agenda for a meeting, as defined in 2-3-202, must include an item allowing public comment on any public matter that is not on the agenda of the meeting and that is within the jurisdiction of the agency conducting the meeting. However, the agency may not take action on any matter discussed unless specific notice of that matter is included on an agenda and public comment has been allowed on that matter�

Please see attached reports.

END STUDENT REPORTS

The Board recessed at 9:55 for a 15-minute break.

The Board reconvened at 10:10 a.m.

SYSTEM ISSUES continued

The following people discussed the new Executive Budget with the Board, exchanging insights and recommendations:

Chair Mercer expressed the desire of the MUS to work with the executive and legislative branches by providing ideas for unsolved problems.  Amy Carlson indicated the most innovative idea in the Executive Budget was to add a staff person in the Governor�s office for the Board of Education.  She also highlighted the funding of equipment for the two-year campuses (with matching funds), and the dedication of a large part of the Budget to proposals received from the Shared Leadership group.  Present Law was funded at a higher level than the last several years.  Mark Bruno indicated the Budget also includes a pay plan increase for MUS.  $30M is being put into the LRBP, with $16M being dedicated to MUS projects.

    Chair Mercer also expressed a desire to have David Ewer and John Bohlinger attend the Board meetings on a regular basis.