Decision Index 2008-2011

M/S (Westerberg/Soltman): To approve the request by the University of Idaho to implement the Design Phase for the Enhancement and Improvements project in the ASUI Kibbie Activity Center, at a cost not to exceed $671,000, funded from private donations. Authorization includes the authority to execute all requisite consulting, design and vendor contracts necessary to fully implement the design phase for the project. Motion carried unanimously.

Lloyd Mues of the University of Idaho presented this item. He explained that it will be funded by private donations.

Lloyd Mues reported that the University of Idaho has worked with its bank to get the funds to do the west wall. A bond will pay off the construction loan and also fund the remainder of the project in full. This is not the part that will be funded by donations. The bond will be financed by facility fees. Board member Terrell noted that facility fees do come out of the fees students pay as do the activity fee, and the technology fee. He reiterated that the plan for this facility has not changed; it has just slowed down.

M/S (Westerberg/Edmunds): To approve the request by the University of Idaho for a Supplemental Resolution for the Series 2010A, 2010B, 2010C, and 2011 Bonds, the title of which is as follows:

A supplemental resolution of the Regents of the University of Idaho authorizing the issuance and sale of (i) General Revenue Refunding Bonds, Series 2010 A, in the principal amount of up to $13,000,000 (the “Series 2010A Bonds”); (ii) General Revenue Bonds, Series 2010B, in the principal amount of up to $12,000,000 (the “Series 2010B Bonds”); (iii) Taxable General Revenue Bonds, Series 2010C (Issuer Subsidy-Build America Bonds), in the principal amount of up to $16,000,000 (the “Series 2010C Bonds”); and (iv) Adjustable Rate General Revenue Refunding Bonds, Series 2011, in the principal amount of up to $67,000,000 (the “Series 2011 Bonds” and collectively with the Series 2010A Bonds, the Series 2010B Bonds, and the Series 2010C Bonds, the “Series 2010/11 Bonds”), authorizing the execution and delivery of Bond Purchase Agreements related to the Series 2010/11 Bonds, and providing for other matters relating to the authorization, issuance, sale, and payment of the Series 2010/11 Bonds.

A roll-call vote was taken; motion carried unanimously.

Board member Westerberg introduced this item. Kimi Lucas, Kent Nelson, Rick Skinner, and Lee White were introduced by Mr. Mues. They are employed by the University of Idaho.

Board member Lewis asked about the debt and the life of the asset. Mr. White explained that the buildings in question have a long asset life. He noted that the longest term bond is for 31 years. He indicated there is interest rate exposure, but it is a very small amount of exposure. Mr. Lewis pointed out that, in the past the Board asked for a statement of the bond ratio of the institutions when it comes to the issuance of bonds. Board President Agidius agreed that the Board should return to that practice. Mr. Westerberg asked that he be provided with further information. Stacy Pearson of BSU explained that at one point the institutions had an eight percent of-debt-ratio that the institutions could not exceed. Mr. Westerberg noted that the Business Affairs and Human Resources committee will take it as an assignment to set policy on the debt-ration percentage and bring it back to the Board.

At this time Mr. Luna was excused from the rest of the meeting in order to attend to other business.

Also, the Board took up Tab 2 of Section 1 of the Business Affairs and Human Resources agenda.

Board member Westerburg presented this item.

President Nellis reported that UI is proposing a 12% increase in fees. He spoke at length about the need to increase the student fee and tuition rates at the University of Idaho. He discussed the mission of UI as a land grant university and noted that the fee and tuition discussion is focused on that mission. Dr. Nellis pointed out that outreach, research, and quality education at an affordable price are the goals of the University. He reported that the University issues more degrees in science, technology, and math than any other institution in the state. He emphasized the seriousness of the University’s financial situation and discussed the steps the University has taken to address the budget reductions. Dr. Nellis reiterated that while every effort has been made to continue operating in the most efficient and effective way possible, the proposed fee increase will allow UI to stabilize its financial situation and continue to move forward in the present economic climate.

Kelby Wilson spoke to the Board. He indicated that the Student Activity Fee Committee looked carefully at the Student Activity Fee and came to agreement as to which programs were important to maintain. Mr. Wilson noted that the students at UI understand the tough economic situation that Idaho is currently in, as well as the difficulties that the University is facing. The students support the proposed 12% full-time fee increase. He encouraged the Board to approve the increase in order to allow UI to continue to offer quality.

Board member Lewis asked about the University’s net asset balances, reserve funds, and unrestricted funds, and the potential availability and usage of these funds. Mr. Ickes explained that those funds from those sources have been used already and so have the overall encumbered reserves in order to address the holdbacks. It was pointed out that those funds are also being tapped to address the strategic initiatives at UI. It was emphasized that there are still available funds, but there is a risk that if too much is taken away, the University will be at risk.

Board member Lewis asked about the flow of funds from stimulus package and Dr. Nellis noted that the stimulus money is one-time. In regards to the increase in the cost of Room and Board, Lloyd Mues explained that the University operated several years with an under-valued program and adjustments had to be made. Mr. Luna asked about the possibility of using dedicated funds if legislative action freed them up. Dr. Nellis explained that the use of dedicated grant funds are strictly regulated by the federal, state, and private entities that issue them. They can’t be used for other things.

Dr. Nellis indicated that UI has been strategic in approaching the issue of being able to provide students with financial aid to ensure accessibility. More distance learning education and outreach education opportunities are being offered in that regard. UI is very sensitive to accessibility and affordability. Institutional support and scholarship dollars are being used as well.

Dr. Nellis reiterated that the University of Idaho has a research mission. That mission requires more expensive curricula in order to deliver science, technology, and math. As the University is making an effort to move in new directions, it also operates five UI Centers in other parts of the state. During the discussion, it was pointed out that the Higher Education Price Index is used to calculate the cost of research equipment, lab materials, and chemicals. Those types of things drive the cost of education up. Dr. Nellis noted that none of the fee increases will go towards salary increases.

Mr. Ickes indicated that an open forum had been held for students to engage in the process. Also, the Student Fee Committee was very involved in the process. Dr. Nellis noted that UI follows the Board policies related to what goes into the athletic budget. He pointed out that the only way UI has been able to augment the athletic budget is through private giving. He noted that the athletic program does serve to draw people to the University. Mr. Mues explained that the athletic department is not close to the cap in terms of the Board policy and that the staff and faculty of the athletic department are also participating in the furloughs.

In terms of efficiencies, UI has recruited students into areas where there is room for them to discuss the proposed changes in the College’s professional fees. He explained that the College has proposed a structural reorganization of the College into a one-unit management structure. This new structure will allow for more flexibility in the delivery of integrated interdisciplinary teaching and research, and meet the call for more efficient management structures. The College proposes extending professional fees to all students in the College because they will all be enrolled in one administrative unit, although still pursuing unique majors. This request will unify the student fee structures in the College to correspond to the one-unit management structure and provide equity among all the students in the College. Students in CAA support this.

Ron Walters, Chair of AAA Advisory Council spoke to the Board related to this proposal. He encouraged the Board to send a message of support by unifying the professional fees within the College of Art and Architecture.

Board member Terrell encouraged the Board to approve the request, noting that the request from the College of Art and Architecture is necessary to support the program. He pointed out that the directive by the Board that approved the re-establishment of the College of Art and Architecture in 2006 added the unfunded mandate costs of the college office. The brunt of this cost is born by the student professional fee. Dean Hoversten noted that currently, art and design students do not participate in funding the College office as do all other students in the College. The request by the College would change that.

Board President Agidius observed that the way the College is now structures makes this request appropriate. He also encouraged the Board to support the request. Board member Edmunds discussed the need for the Board to address the problem at a statewide level with an ongoing approach that can be applied in all situations. For that reason, he is not in favor of the motion. Board President Agidius agreed that the Board should look at the statewide policy, but encouraged the Board to approve the request that is before the Board today because the need is immediate.

Board member Lewis agreed with Board member Terrell in terms of the situation created as a result of past decisions made by the Board related to the College of Art and Architecture. He also agreed with comments made by Board member Edmunds about looking at the statewide policy. He indicated that he is troubled by the situation that the Board helped to create by approving the re-establishment of the College.

Board member Westerberg noted that the Board has previously discussed taking a look at things done in other states in terms of professional fees. He reported that work is being done in that regard. He indicated that while this is a laudable request, he will vote against it because it sets precedence.

M/S (Terrell/Luna): To waive Board Policy V.R.3.b.iv. with respect to the imposition of a professional fee for all students in the University of Idaho College of Art & Architecture, and to approve the professional fee as requested. Motion PASSED 6-2 (Edmunds and Westerberg voted Nay).

The University takes seriously its role as the people’s university. UI has nationally recognized faculty and students and their accomplishments have brought positive recognition to the University. Dr. Nellis shared that the University of Idaho has been featured in the national media and also in high level publications related to the bold action it has taken to position itself for a new a better future.

Dr. Nellis reported that the University of Idaho is serving more students. It had a record fall enrollment and experienced additional growth in the spring. It has the highest graduation and retention rates in Idaho. The University continues to develop and strengthen community partnerships statewide as a key component of its immediate and future-focused success.

Dr. Nellis reported that UI will graduate its 100,000 student this year. He noted that UI leads its peers in a number of signature areas including natural resources, biomedical research, and in the number of national merit scholars. UI collaborates with other entities statewide to continue strengthening Idaho’s economy through competitive research dollars.

The University of Idaho strategic plan for 2010-2015 is called Leading Idaho. It focuses on core principles, and looks at the next quantum leap for the University. It is tied to the standards of the NWCCU.

The Board thanked Dr. Nellis his report and the University for its hospitality.

Board member Westerberg presented this item.

Board member Westerberg presented this item. Lloyd Mues of the University of Idaho provided additional details and noted that this project will be constructed totally out of donations.

Board member Terrell excused himself from discussion and vote on this item due to a possible conflict of interest.

Provost Doug Baker discussed the steps that the University has untaken over the past two years to restructure and reconfigure departments in order to streamline its management structure. This is one of the steps in that process.

Board member Edmunds presented this item.

M/S (Soltman/Agidius): To approve the request by the University of Idaho to establish secure areas for the purpose of allowing the above specified pre-game activities (North Kibbie Field, Student Activities Field, University Commons Building and Menard Law Building) for the 2010 home football season, such events to be in compliance with Board policy section I.J. and the following conditions:

1. The service area shall be secure, surrounded by a fence and otherwise enclosed to control access to and from the area.
2. The pre-game events shall be limited to four hours, ending at kick-off.
3. Alcohol making or distributing companies may not sponsor the activities or tents.
4. UI shall use a color-coded wrist band or pass admission system to identify attendees and invited guests; and a separate color coded wrist band to identify attendees and invited guests; and a separate color coded wrist band to identify attendees and invited guests who are of drinking age.
5. UI shall send companies sponsoring a corporate tent a letter outlining the Board alcohol policy and further conditions set by the Board. The letter will state that the minimum drinking age in Idaho is 21 and that at no time may they allow any underage drinking and/or serving of alcohol to visibly intoxicated patrons.
6. There must be no more than two entry points, each manned by security personnel, for the secure area.
7. Security personnel shall be located throughout the secure service to monitor use of wristbands, patron behavior; and at entrance and exit.
8. No person may exit the secure area with alcoholic beverages.
9. Tent sponsors shall insure and indemnify the State of Idaho, the State Board of Education and Board of Regents of the University of Idaho and the University of Idaho for a minimum of $2,000,000, and shall obtain the proper permits and licenses.
10. The area is for sponsors to entertain clients/guests for the fall of 2010 home football games, including the sales and service of alcohol.
11. This exception is only for the 2010 football season; the University shall bring the matter back to the Board after the conclusion of the 2010 football season for reconsideration for 2011.

Motion carried 6-1 (Lewis voted Nay).

Board member Terrell asked for clarification on the number of areas where alcohol will be served and the reasoning behind it. Dr. Nellis emphasized that UI takes the monitoring of alcohol on campus seriously. There have been no incidences with those areas in the past related to alcohol consumption. He explained that UI would like to be able to utilize the Commons during the cold weather versus using the tent and the heaters. The area in the Commons would be more secure and it is more isolated from the general population. The Menard Law Building area is a substitute area for use only in bad weather. These areas are not expansion areas.

Board member Lewis asked for clarification on the kind of access that will be allowed in these areas. UI explained that there are two things. One is an area where you have to be 21 to get in; the other is an invitation only area and where if you are over 21 you get a wristband. Mostly donors and supporters are invited to that second area and they often bring family members so the wristband method allows them to control alcohol. In regards to the Commons there will be security stationed at the doors and only patrons 21 or over will be admitted. In the Law Building it is an invitation only situation similar to what already exists.

Board member Lewis noted that this is a distinction where the Board needs to make a decision. In the UI situation there is a mixed use situation where the alcohol service area is not cordoned off. Board President Westerberg indicated that it is not clear to him what is appropriate and what isn’t. In some cases mixed ages is okay and in others it is not. As the Board reviews its policy that is a determination that probably needs to be made as to which side of the line it wants to stand on.

At this time the Board returned to item 6 which was deferred until this time to allow for remarks from the Humanitarian Bowl representative.

It was clarified for Board member Terrell that the base salary is the same as Coach Akey has been paid. Rod Spears of UI indicated that the University received a scholarship reduction from the NCAA this year due to the average number being below the APR average which is based on the retention and academic performance of the students. That reduction will continue for two more years although it is possible for UI to appeal the reduction in scholarships.

Mr. Lewis referred to provision 3.1.1a with language that was added that says Coach Akey will be eligible to receive supplemental increases not reviewed by the Board. Mr. Spears noted that this has been the standard language and UI will gladly add the language approved in the previous motion if it pleases the Board. Kent Nelson of UI noted that this language is related to things like CEC.

Mr. Lewis took a moment to congratulate the program and the work that Coach Akey has done on behalf of UI and Idaho.

Institution representatives were invited forward to respond to questions related to this item. Board member Lewis pointed out that he had concerns about having these items in the Consent agenda because they are budget items. He asked that they be included in the regular agenda in the future.

Mr. Lewis asked about BSU’s expenditures. Stacy Pearson of BSU indicated that there is a payout on a current basketball coach and assistant coaches as well as a new coach. Mr. Lewis asked about ISU’s anticipated institutional support. Mr. James Fletcher of ISU agreed to check that and get back to the Board with details.

Mr. Lewis asked UI about a budget shortfall and what appears to be a significant deficit. Rob Spears pointed out that this number is a very conservative estimate. Lloyd Mues introduced Keith Ickes, Executive Director of Planning and Budget to provide additional details.

Board member Terrell noted that athletics bring positives to the campus and agreed that the University needs to pay close attention to how it manages its athletic program. Dr. Nellis emphasized that the University is committed to bringing in the resources and making the hard decisions regarding the management of the program. Mr. Ickes explained that this is the best evaluation UI is able to present at this time. It will do all possible to control costs, in appropriate fashion. Mr. Terrell asked UI to keep the Board posted as to positive moves and setbacks. Board member Agidius asked for a formal update to BAHR and the Board in October.

Board member Lewis raised a point about student fees and noted that the Board was unable to give UI the level of fees that they said they desperately needed. He suggested that UI should come back to the Board with a new budget. It was pointed out that unlike the area of student fees and other resources, the athletic budget is more difficult to predict. Mr. Lewis noted that the University’s reserves are critically low. He suggested that its budget should show a zero budget not a deficit budget.

Board member Terrell summarized that two directives had been mentioned. He noted that Board member Agidius had asked for the Athletic Committee to meet and also for BAHR to meet related to UI’s budget in order to go through some of the issues and see what can be done to make it work. Mr. Terrell noted that Mr. Lewis had asked for UI to submit a zero balance budget.

Board President Westerberg suggested that the Board wait until October to hear the action plan from UI, but reminded UI to work diligently to bring the numbers in line. Mr. Lewis suggested having an interim conference call to get a status report. Mr. Terrell agreed that a monthly update would be good. Mr. Agidius noted that a combined meeting of BAHR and the Athletic Committee could be arranged.

At this time, Paul Agidius was excused for the remainder of the meeting due to a scheduling conflict.

Keith Ickes of UI addressed the Board on behalf of the Financial VP’s. He referred to a white paper included in the Board materials that summarizes the issue of differential fees. He pointed out that differential tuition refers to any tuition charged to the students of a particular group that is different than the tuition charged to other students, where the difference is based on certain factual criteria.

Mr. Ickes noted that professional fees are already being charged to students in certain programs that have a higher cost. There are also course-specific fees which are associated with direct and identifiable costs of taking a particular course. These course-specific fees are not generally considered differential fees for that reason. Methods of charging differential tuition include charging according to the student’s program major or program; another is to charge by the program.

Mr. Ickes shared that some of the concerns, related to differential tuition, are that it is another mechanism for raising tuition, it can complicate financial aid operational management, or it may raise a question of access. Any proposal brought to the Board will include an outline from each institution that includes a defensible proposal as to how it would apply a differential fee policy.

Board President Westerberg indicated that any proposal on how differential fees would be implemented has to make sense in a pricing mechanism within the institution. If one student pays more and another pays less, that needs to be included too. It was noted that revenue and the way institutions price education is one issue; how that education is delivered is another.

Board member Soltman suggested that this might simplify the current structure. Mr. Ickes explained there are several approaches that might be considered. One is to take an existing program like engineering and couch it in broader terms to give the Board an idea of how the framework might look.

Matt Freeman indicated that the institutions have discussed the possibility of bringing a draft policy to the Board for first reading in August; and also to present at that time a system-mockup using the engineering program. He noted that the institutions are looking for a go-ahead at this point. Board member Terrell recommended having a draft policy come forward before the first reading so the Board can build on it. Board President Westerberg agreed that having a draft policy first would make sense and should include a draft program.

Jim Fletcher of ISU added that ISU strongly supports the concept of differential fee, but with respect to having a pro forma model, it needs to be financially right and communicable and acceptable within the community. And, ISU would like the opportunity to review this with its students as well.

Stacy Pearson of BSU noted that the timeline does give some flexibility, and also allows the institutions to ask for differential fees at the April 2011 Board meeting. She pointed out that by tracking backwards from that date on the timeline, the institutions would need to bring something to the Board in August with a second reading in October or December.

Board President Westerberg reminded the institutions that the Board has the option to reject any proposal. Mr. Terrell clarified that the intent is to get the draft and move forward, keeping in mind that if the draft isn’t acceptable it gets returned to the institutions for reworking. The process would start in August with the draft copy. The institutions thanked the Board for allowing them to proceed on this issue.

Board member Terrell expressed concerns about this request related to financing. He expressed concerns that this project deals with athletics and not academics. He expressed concerns that there are other deferred maintenance situations at UI that should receive attention first.

Lloyd Mues of UI walked through several of the issues with the Board. He noted that this facility happens to be an athletic facility, but it is heavily used by the University and the public, for educational and community purposes in addition to athletics. He explained that it is about 30 years old and it is falling apart. This is not a project that falls under the Permanent Building Fund. He reiterated that it serves more than athletics. This project came to the surface as a priority on its own merit. He agreed that other projects on campus need attention as well, but for this level of money and this level of assurance for payback, this project did rise to the top. Some of those other projects would fall under the Permanent Building Fund. This one will be funded by a short-term loan from a bank.

Mr. Mues explained further that the challenge for UI is that the construction window in northern Idaho is short. He reiterated that the project will be paid by fees, will require nothing additional and that it will be paid off in five years.

Board member Lewis indicated his only issue is with the process and suggested that UI come back in to the Board with the design plan. Board member Terrell made a motion to hold this item for a special Board meeting, but the motion died for lack of a second.

M/S (Terrell/Soltman): To approve the request by the University of Idaho to obtain financing from a lender of its choice in the amount of $2.5 million for the purpose of financing the Dan O’Brien Outdoor Track and Field Complex renovation and Improvements project, and authorizing the Vice President for Finance & Administration to execute all necessary documents on behalf of the Board of Regents. Said financing shall be secured, if applicable, in accordance with Section 33-3804(j), Idaho Code, and at an interest rate not to exceed 5.50%. Motion carried unanimously.

M/S (Terrell/Atchley): To approve the request by the University of Idaho to obtain financing from a lender of its choice for approximately $2.9 million for the purpose of partially financing the Kibbie Activity Center Enhancement Project, and to authorize the Vice President for Finance and Administration to execute all necessary documents on behalf of the Board of Regents. Said financing shall be secured, if applicable, in accordance with Section 33-3804(j), Idaho Code, and at an interest rate not to exceed 5.50%. Motion carried 4-2 (Edmunds and Lewis voted Nay).

Board member Terrell noted that in February 2010 the Board approved the design phase of this project. UI reported that the design phase is underway and this request is for the construction phase. Lloyd Mues indicated that this project is 100% funded by giving. Vice President Murray of UI provided details. It was noted that there is a mismatch between when the pledges come in and when the payment of certain construction costs are due. A bridge loan will be secured to meet that difference.

Board member Lewis asked for clarification on the point of the loan and expressed concern about the risk of a loan that is secured only by pledges. Dr. Nellis noted that this type of project is common. He explained that this project is a transformative project. He pointed out that if the Board looks at the pledges that have already come in, it is a positive. The bridge loan covers a gap. The commitment of the alumni is evident in terms of the amount of money already raised.

Mr. Murray emphasized that the revenue enhancement that this project will generate is significant. He pointed out that there is a pledge contingency built into the project. There is also a fee built into the project that can be used to backfill the pledges if necessary. Mr. Lewis noted that projects that are privately funded normally don’t have a risk like this one does. Dr. Nellis indicated that in terms of looking at construction costs and securing this loan which is a bridge loan, waiting too long to take care of this could impact the situation. Mr. Mues noted that the loan can be paid off ahead of time without penalty. That is the intent of the University.

Mr. Terrell asked for clarification about the cash available for projects. Mr. Spears noted that there is more than enough money in committed pledges and sponsorships to cover the project. The bridge loan is to cover the gap time-wise. He noted that this is not about athletics because the building is used 60% of the time by non-athletics.

Mr. Lewis clarified that he recollects that the Board hasn’t required 100% of the cash in hand before a private project is approved; the difference here is that there is a need for a loan to cover the gap. He indicated he will vote against this because it is not a good path to approve a privately funded project that has to be backed by a loan.

Subsidiary M/S (Terrell/Soltman): To postpone this to the August meeting and refer it to the BAHR Committee and bring it back. Motion carried unanimously.

Dr. Nellis noted that Dr. Jack McIver who was going to appear to report on this request had to leave for a family emergency.

Board member Edmunds expressed concern that this project appears to get around the issue of tech transfer policy. If that is the case, it would break up the effort that has been underway to build partnerships. Another issue for him is the governance structure through CAMBR and the way it is set up. Mr. Edmunds indicated he was expecting tighter controls by UI. He noted that he is struggling with this request.

Kent Nelson of UI spoke to the issues that Mr. Edmunds raised. He noted that the project helps form a bridge between the University and private industry. This is a concept of an applied research laboratory where experts can carry out more focused research projects to meet industry standards. This is not an attempt to make an end-run around policy. With respect to control, there has to be a distinct entity to qualify for the federal requirements of separation. This is a 501.3c entity. For purposes of LASR, this meets the requirement of working with an educational entity. In order for the entity to function it has to be a symbiotic relationship. If that doesn’t happen, the entity loses the 501.3c rating. Mr. Nelson noted as well that the intellectual rights of the University would be protected. The President of UI appoints all the members of the board. Dr. Nellis indicated that this is a common entity across the country as a way to create a dynamic for tech transfer. Mr. Nelson clarified that other documentation will be drafted when the entity and the University enter into projects.

Mr. Edmunds indicated that there could likely be control issues with the foundation after the University puts together the original slate of directors. Dr. Nellis referred to the articles of incorporation in the information that is available. Mr. Nelson referred to Article 4 that documents the connection between LASR and the University.

Mr. Lewis noted he would have expected an extensive service agreement between LASR and the University. He pointed out that the bylaws provide the scope, but do not include anything about the contractual obligations between LASR and the University. Mr. Nelson reiterated that for every project there would be whole set of agreements for that project that comply with Board policy. Mr. Nelson also indicated this is the first step in a series of steps.

Mr. Edmunds restated his concerns.

Dr. Goodwin indicated that Idaho’s share of regular National Science Foundation (NSF) research funding is increasing. The Research Infrastructure Improvement (RII) funds personnel, research, cyber-infrastructure, diversity and outreach, management/stewardship, and sustainability. One example of outreach is the Idaho STEM Pipeline. This has drawn national attention. EPSCoR is in the process of transforming data policy.

Dr. Goodwin indicated that Idaho EPSCoR needs to position itself nationally so it attracts attention in terms of cyber-infrastructure. He pointed out that there are three key positions to be filled related to this effort. This is a value-added enhancement to INL and other initiatives.

Senator Noh thanked the Board for the opportunity to report. He indicated that Idaho EPSCoR appreciates the patience and involvement of the Board during the period of transitioning back under the oversight of the Board. Idaho EPSCoR looks forward to having a cooperative working relationship with the Board.

Superintendent Luna asked if there are any changes in salary or benefits.

Board President Westerberg said there are not and that all salaries and benefits remain flat.

Selena Grace, State Board of Education, provided a presentation, history, and background for this item. The National Center for Higher Education Management Systems (NCHEMS) was contracted to provide a proposed list of peers using a MGT study. Peer recommendations were reviewed by the institutions and it was felt the institutions are in a better position to approve their own peers.

Rod Lewis indicated that the model contract included a clause that changes in salary were able to be made without further Board approval. Have those changes been made?

Mr. Freeman indicated there is no such clause in the contract under consideration.

Milford Terrell clarified that the funds cannot be used for any other purpose than those approved, which is to pay down the interest on the bond. The expected payback is within ten years.

Matt Freeman outlined two changes to the U of I faculty staff handbook that the University if seeking approval for. The primary one is the creation of a new faculty rank of “University Distinguished Professor”. The rank carry with it an annual stipend of $5,000 per year for five years, which would be funded with fundraising. The other was minor changes to the faculty promotion process.

Milford Terrell has concerns if the funding cannot be raised, would this go to appropriations.

U of I indicated that if the funds are not raised, stipends would not be conferred. There is a maximum amount of 15 appointments for a total of $75,000, but there is no minimum amount. If no funds are raised, the stipend would be zero. The stipend would be on a five year rolling award, with no more than 15 appointments at any given time.

Emma Atchley asked for clarification that the stipend would be awarded until retirement.

U of I indicated that is correct. If a professor was three years from retirement, the stipend would be paid until retirement and not for the full five years.

Richard Westerberg asked who confers the title.

U of I said the title is conferred through the Provost to the President and by approval from the University President.

Mike Rush indicated that any changes to the Faculty Staff Handbook are required by Board policy to receive approval by the Board and is the reason this item has been presented.

Sona Andrew, Provost of Boise State University, presented this item to the Board. This change will reduce fees to students, improve graduation rates, and free faculty time.

Milford Terrell expressed concern regarding the change to the motion to include all institutions.

Provost Olson, Idaho State University, indicated that most states have a minimum and 120 is a standard across the country, as well as within the Pacific Northwest. The motion does not mandate changes, but give the institutions the opportunity to do so.

Ms. Andrews indicated that BSU raised this issue with CAAP some time ago and the other institutions were interested as well. This is not for a specific academic program, but gives the institutions the ability to look at each individual program.

Provost Baker, University of Idaho, stressed that this is only approval to reduce the credits to 120 if the university chooses to approve the reduction in credits required.

Board President Westerberg noted there is a fair amount of information provided by the institutions. He asked for clarification to ascertain if those descriptions align with the role and mission of each institution. He urged the institutions to make sure that was the case.

Dr. McIver asked for feedback from the Board as they seek to move forward. Board member Soltman noted this is a great collaborative effort and urged them to continue.

Mr. Soltman introduced this item. He noted that there is quite a bit of discussion underway on this subject, specifically in terms of BSU and UI continuing the tradition of playing a football game each year.

President Nellis of the University of Idaho was invited to comment on this. He agreed that this is a time of transition for BSU. Nevertheless, BSU and UI have a long tradition of playing football against one another and that game results in economic advantages to the state. He urged the Board to encourage the yearly games to continue.

Board member Soltman introduced this item. Tracie Bent of the Board office discussed the changes. She pointed out that in reviewing the amendment to the policy it was noted that UI’s practice of allowing underage family members into the President’s tent location where alcohol was being served was a violation of the Board’s policy. As a result, additional changes in the amendment were made to address this and those changes are substantive in nature.

Kent Nelson, legal counsel for the University of Idaho, came forward to provide more information to the Board. Mr. Nelson noted that the redraft has substantial changes. He referred to the language in subparagraph C that notes that even though this policy is in place, the institutions will continue to come forward to the Board each year and allow for Board review. In addition, in section II.3.1 where there was a bar on minors, it would require specific approval from the Board each year which is how it has been done in the past.

Board member Lewis observed that the inclusion of language to present the proposal every year is helpful. He expressed concerns about the third sentence where it says that the Board will review the proposals. He noted that it appears, by the way it is written, that the criteria will be used as guidelines. He suggested that it needs to be more clearly stated. Mr. Lewis indicated that in the past when the criteria were set forth it was clear that advertising would not be allowed and that needs to be included in this policy as well.

Board member Agidius asked for clarification as to the points to be addressed in the reassessment of the amendments. Board member Lewis indicated that the change from “minimum requirements: to “criteria” should be reversed; it needs to remain as minimum requirements. Second is a change in nuances, in allowing persons below the legal age to be in the defined areas. Board member Terrell noted that the issue of advertisement be addressed as well and be clarified in the policy.

Board member Soltman explained that the amendments were written to reflect the Board’s current practice. Board member Agidius indicated that he wants to see Board approval if there are minors in the area where alcohol is being served. Ms. Atchley noted it is important to remember that these events are invitational events, not public events. She suggested the policy can be written to reflect and understanding of that fact. She referred to section I.1 for the benefit of the Board.

Lloyd Mues of UI presented this item and explained it ensures policies on institution fees correspond to proposed revisions to the Idaho Code.

Lloyd Mues of UI discussed the revenue increases. He noted that there is a small increase that results from increases in the student activity fees. In addition, there have been changes related to ticket sales, the Lear Field services, and also an increase in the gender equity funds going to athletics. Keith Ickes, the Director of Planning & Budget at UI explained that the increase in expenditures related to the Lear Field contract. He pointed out that the gross ticket revenues and all the expenditures are a programmatic change. In addition, the ticket office was moved and now the full ticket activity is shown where it wasn’t before. Mr. Ickes explained that the coaches’ salaries and benefits went up, as well as the equipment and supplies.

Mr. Lewis suggested that the Board direct UI to come back with a recovery plan in April. Board President Westerberg directed UI to do so.

Subsidiary M/S (Lewis/Terrell): To postpone this item to allow IRSA and CAAP more time to study this proposal and to bring it back to the Board in April. Motion carried 5-2 (Agidius and Atchley voted Nay).

Provost Doug Baker from the University of Idaho presented this item. Dr. Baker noted this is a self-sustaining program and the program has been reviewed by CAAP. He introduced Dr. Corrine Mantle-Bromley, the Dean of the College of Education, Dr. Kathy Browder, the Department Chair of Movement Sciences at the College of Education, and Jeff Seegmiller, Assistant Professor of Athletic Training and WWAMI faculty member, to provide additional details.

Dean Bromley outlined the details of the degree. It is a clinical doctorate. If it is approved at this time, it will become the first degree in the nation for athletic training. The degree is a six semester program and requires full-time attendance so it can be done in two years. Dr. Bromley reported that the proposal went through intense scrutiny by the College of Education, the University Faculty Senate, two external experts in the field, the Provost, and the Vice President of Finance.

Dr. Seegmiller discussed the particulars of the program. The program has a model that allows for measures to be made of the outcomes. Dr. Browder spoke about the rigor of the program. She explained that work has been underway for three years to make sure it has the rigor it needs. It is in accelerated format. She pointed out that it is a clinical doctorate, not an academic doctorate, and explained the differences for the benefit of the Board.

Board President Westerberg asked about the demand and need for the program. Dr. Browder indicated that they looked at the demand and, based on the labor market demand analysis, the conservative estimate is that there are currently 30,000 people nationwide who would be eligible for this program. In addition, the commensurate financial reward will be significant.

Board member Lewis raised a question as to whether this program really rises to the doctorate level. He expressed concerns about going down a path that demeans the degree. He emphasized that his struggle is that it is a clinical doctorate, and only a two-year program. He suggested that it lacks the intensive academic component.

Dr. Browder noted this is an advanced clinical doctorate in comparison to an entry level clinical doctorate. She made a point that athletic training is in transition nationwide, and this is a response to that transition. She explained again that the clinical doctorate differs from other doctorates, and gave some comparative information to help the Board better understand the concept.

Dean Bromley explained that throughout the program there will be intensive coursework that relates to each person’s practice. Dr. Seegmiller pointed out that the requirements of the program means that students coming into it must have met all the requirements of the practice. In terms of the curriculum, Dr. Seegmiller indicated that students must have foundational courses as part of their undergraduate degrees. At the doctorate level, students will be taking advanced courses and also conducting research in their related fields as part of that coursework. Dr. Browder reiterated that the standard competencies for accrediting programs demand that the rigor is high. Students must also be credentialed and certified by the national board.

Based on discussion, Board member Lewis asked if it was possible to postpone this item in order to have time to better understand the scope and nature of the proposal. A subsidiary motion was made for that purpose.

Dr. Nellis noted that UI is trying to preserve things at the University. He explained that over the past decade there has been a fundamental change in the funding paradigm in Idaho, and nationally as well. As the amount of state funds has decreased, the amount of tuition/fee funding has increased. He noted that endowment funding has also decreased. Dr. Nellis noted that over the past decade, the purchasing power of students is down.

Dr. Nellis indicated that UI has addressed the funding situation by eliminating positions, closing programs, limiting hiring, reorganizing colleges, eliminating classes, and invested in energy savings to reduce future costs. The transformational changes include promoting entrepreneurial thinking to cut costs and raise revenues; increasing class and program efficiencies; expanding online and dual courses; refining interactive learning opportunities; revamping the financial aid program; restructuring research and economic development; overhauling recruiting and enrollment processes; and increasing community involvement.

Ms. Perez explained that one of the things the students will work on this year is evaluating the student activity fees to see if those activities actually benefit the students. Fees going to activities that are not beneficial will be redirected.

Dr. Nellis discussed the fiscal challenges UI is facing including reduction of state funding, increases in costs, the need to use reserves and bridge funds, and other unfunded state obligations. Dr. Nellis referred the Board to the current tuition and fee package.

Stephen Parrott discussed the proposed fee increase for this year. An 8.4% fee increase is proposed for resident students; the non-resident fee increase is 8%. The graduate fee proposed fee increase is 15%. The breakout of the student activity fee is $5.26 per year per student. It is part of the tuition and fee package. The technology fee and the facility fees are not increased. Mr. Parrott explained that the proposal was taken to the open forum for students to allow them the opportunity to respond. He noted that there has been a very positive response; they would rather see an increase than to see things get cut.

Dr. Nellis indicated that if the fee increases are approved. UI’s FY 12 tuition and fee rates still fall below the peer institutions fee and tuition rates. Dr. Nellis discussed how the fee increase will help UI meet the challenges. The internal budget cuts for FY 2012 based on the proposed fee increase will be $1.8 million. UI is building for the future. The University continues to be highly ranked for what it offers: the return students have for their investment; the quality of the education opportunities it provides; and its reputation nationally. UI wants to preserve what it has. This proposal has been thought through very carefully.

Steve Parrott thanked the Board for allowing them to attend the meeting. He pointed out that UI is very unique and has a great partnership between its students and administration. Administration has been open to listening to the students and their concerns.

Board member Terrell raised a point about the enrollment assumption. Dr. Nellis indicated that the funds that come in will be used as outlined in the proposal even if the enrollments are higher than estimated. Mr. Nellis added that UI is using a different approach to recruit new students.

Mr. Terrell asked for clarification on the Kibbie Center operations. Mr. Parrott pointed out the Kibbie Dome is the ASBU Kibbie Dome and used for many other events, classes, and activities in addition to athletics. Mr. Terrell asked why the Spirit Squad is funded with student activity fees and Mr. Parrott explained that the Spirit Squad helps with recruiting, and performs at other student activities beyond sporting events. Ms. Perez explained that UI does not fund the Spirit Squad fund so the students voted to fund them.

Mr. Terrell asked about UI’s strategy if the economic situation continues. Dr. Nellis noted that the Board needs to look at the transformational activities and programs that UI has initiated because they could generate revenue and offset costs. UI hopes to increase the out-of-state enrollments as well to increase revenue through gifts, grants, and foundation support. Dr. Nellis noted UI will continue to do business differently. He expects there will be increasing costs such as deferred maintenance, utilities, technology and software, etc. And, while UI is working with contractors and vendors to keep those costs under control, the needs won’t go away. Also, there have not been salary raises for staff in nearly five years and there are serious consequences related to that as the University continues to lose staff to other states.

Board member Edmunds asked about the multiplier used for non-residents and Mr. Ickes noted that the basic fee package is charged to every student; then the non-resident fee package is added on top of that.

Mr. Edmunds asked about the direction all of the institutions are going noting there seems to be a lot of duplication. He suggested that there should be serious talk about whether growth is the right thing. In terms of the overall cost of education in the state, if there was a different approach with more focus on programs and less focus on growth, there could be significant costs savings.

Ms. Atchley asked about the online courses offered at UI and whether an online course offered by one institution can be transferred to another institution in the state. Dr. Nellis noted that there is complete transparency, and transferability isn’t an issue. However, there are some for-profit institutions where it is an issue. In terms of costs savings, Dr. Nellis noted that there is such a range of online courses and such a variety in the types and requirements, online learning does not always guarantee that there will be a cost savings. It varies significantly depending on the subject matter, the design of the course, the enrollment in the course, the teaching staff, the assessment, etc. Provost Baker noted that there is confusion when the term online is used; it is good for some courses, and not good for others. Online learning is nor watching a video. A lot of active teaching is required and so there is cost factor there.

Board President Westerberg expressed his appreciation in having the students involved in the decisions and the Board presentation. He asked about the use of student tuition to fill the gaps. Dr. Nellis explained that UI used $4.2 million of its reserves this past year to fill in the gaps. It hopes to make up some of the loss of those reserves funds so they won’t drop too much lower.

Mr. Westerberg asked about ways to increase summer enrollments and summer rates. Provost Baker indicated that UI doesn’t believe price is the lever because it is already pretty low; so it is looking at place, price, and promotion. It is also looking at distance education as well in terms of summer courses.

Board member Terrell raised a point about the institutions going to self—funding of athletics. Steve Parrott noted that there would be immediate concerns for the students if that were the case. Currently, students benefit significantly from athletics. If the funds go away, students would have to begin to bear more of the cost in order to attend events. Also, the additional uses that students are able to take advantage of within the athletic department are important.

Mr. Edmunds returned to the idea of revenue streams and costs streams; Some of those grant/financial streams are drying up or diminishing significantly for students. The bottom line is how do students afford to go to school? The debt load when students come out of school is a serious issue. Mr. Ickes indicated that UI will have a research project underway to study this issue.

Mr. Luna asked if UI has looked at BYU-Idaho’s three semester system. Students are assigned which two semesters of the three they can attend; there is no summer school option. Provost Baker indicated UI has looked at this; but traditionally their students go home and work in the summer. Dr. Baker indicated UI may not have the same flexibility as BYU-Idaho in telling students they can only take two semesters when there are three semesters available.

M/S (Terrell/Soltman): To approve all other fees for FY2012 for University of Idaho as contained in the University of Idaho fees motion sheet which will be made part of the written minutes. Motion carried unanimously.

Board President Westerberg thanked the institutions for their presentation. Bill Goesling asked that the Board thank the student leaders for their participation and involvement by drafting a letter to them to that effect. They were a key component in the decisions today. Board President Westerberg agreed and directed the Board staff to do so.

Dr. Nellis noted achievements including increasing graduate enrollment, extending recruitment initiatives, and an emphasis on programs related to community and culture. They’ve adopted an enrollment and recruitment plan that extends beyond the Moscow campus. Over the past two years UI has seen the largest freshman enrollments; one third of them are the first in their families to attend college. They have 81 national merit scholars. As far as retention rates, 81% of freshmen are returning.

UI has many physical locations statewide and it continues to build for tomorrow. The facilities, the research enterprise, and the campus improvements have been addressed in spite of the financial constraints. UI is in the midst of a capital campaign; it will go public with it in 2012. The campaign focuses on students, faculty, programs, and facilities.

Dr. Nellis shared about the Polya Math Learning Center which gives students structure and an appropriate delivery model to maximize success. It is a national model. Dr. Nellis discussed the UI research enterprise. He noted that the total amount of awards received in FY 2011 have benefited the University and its students during difficult economic times. UI has transformative programs related to economic development underway including the University Economic Development Council and the Laboratory for Applied Science Research. Idaho businesses have sponsored a number of startup efforts as well.

UI is a leader in partnering with other businesses and institutions. The Center for Advanced Energy Studies in Idaho Falls (CAES) is one example and INBRE (the Idea Network) is another. UI has educational partnerships with WSU, BSU, and BYU-Idaho. Outreach and engagement are part of the mission of UI as a land grant university. Extension programs have earned national recognition. Budget line items that support key programs were mentioned.

Board member Soltman thanked Dr. Nellis for his report.

Lloyd Mues discussed this item. He noted that the biggest benefactor of this program is the K-12 students. It is a certificate-producing program and it is one of the programs that is very entrepreneurial.