PRESENT: Regents Axtell, Boyle, Brandes, Burmaster, DeSimone, Gottschalk, Gracz, Jones, Krutsch, Marcovich, Mohs, Olivieri, Randall, Smith and Schneiders

ABSENT: Regents Barry and Klauser

- - -

Introduction of Elizabeth Burmaster and Tommie Jones

Regent President Smith introduced new Regents Elizabeth Burmaster, who took office earlier in the month as Superintendent of Public Instruction, succeeding John Benson, and Tommie Jones, who was appointed by Governor McCallum as the student member of the Board, succeeding Joseph Alexander. Regent Jones is a senior, majoring in political science at UW-Whitewater.

Stating that she is pleased to serve on the Board, Regent Burmaster noted the unique responsibility and opportunity associated with her position as State Superintendent. She looked forward to providing leadership in PK-16 and other Education Committee initiatives.

Regent Jones expressed appreciation for the opportunity to serve on the Board and noted that he looks forward to working with Regents, Chancellors and others throughout his term.

- - -

APPROVAL OF THE MINUTES

There being no additions or corrections, the minutes of the June 7 and 8 meetings of the Board stood approved as distributed.

- - -

REPORT OF THE PRESIDENT OF THE BOARD

Regent Randall read the following resolution of appreciation for Senior Vice President Al Beaver. The resolution was adopted by acclamation with a standing ovation.

Resolution of Commendation to Albert J. Beaver

Resolution 8402: WHEREAS, Albert J. Beaver has served the University of Wisconsin System for what seems like forever (actually, only 35 years), first on the faculty at UW-River Falls, then at the System Administration (including nine years as Associate Vice President for Academic Affairs), then for three years as Interim Chancellor of the University of Wisconsin-Extension, and finally for six months as Interim Senior Vice President for Academic Affairs; and

WHEREAS, one year ago -- the last time he supposedly retired -- we said he had "capped an illustrious career of teaching, research, meritorious public service and resourceful leadership" (but we obviously were wrong, since he came back to a bigger office and a fancier title); and

WHEREAS, as Interim Senior Vice President he used his extensive and valuable experience in Academic Affairs to focus the staff during a protracted transition period, assist in the appointment of a new Associate Vice President, and give careful attention to the delicate issues of transfer credit policy and credits-to-degree; and

WHEREAS, his latest (we hesitate to say "last") appointment motivated the search committee as nothing else could to conclude the search for a permanent successor, since we'd run out of retired chancellors to press into service; and

WHEREAS, he has demonstrated once more what was said a year ago, that he "has been recognized for his direct, honest, and collegial approach in his dealings with Regents, System Presidents, Chancellors and countless other individuals and constituencies with whom he has interacted"; and

WHEREAS, we cannot afford to keep passing annual retirement resolutions on his behalf, since these things do cost money;

BE IT THEREFORE RESOLVED, that the University of Wisconsin System Board of Regents commends Albert J. Beaver for his successful tenure as Interim Senior Vice President for Academic Affairs and his lifetime of service (and then some) to the University of Wisconsin System, and extends sincere best wishes to him on the occasion of his (latest) retirement as a good and faithful servant of the Wisconsin Idea and an accomplished leader of the University of Wisconsin System.

Expressing appreciation for the resolution, Dr. Beaver thanked the Regents, President Lyall, the cabinet, chancellors and provosts, faculty, staff and students for all the support he had received during the past year as Interim Senior Vice president and throughout his long career with the UW System.

Report on the June 22 meeting of the Educational Communications Board

A written report on the June 22 meeting of the Educational Communications Board was provided.

Report on July 11 meeting of the Hospital Authority Board

Regent Gottschalk reported that after 11 months of the fiscal year the Hospital Authority was doing well financially, already having surpassed its budgeted bottom line by over $1 million. This success, he noted, is due to the dedicated efforts of the CEO, CFO and their team.

- - -

2001-2003 ANNUAL OPERATING BUDGET

Adoption of Resolution 8403 was moved by Regent Smith and seconded by Regent Randall.

2001-2002 Annual Operating Budget including Rates for Academic Tuition, Academic Tuition Refund Policy and Schedule, Segregated Fees, Textbook Rental, Room and Board, and Apartments

Resolution 8403: That, upon the recommendation of the President of the University of Wisconsin System, the 2001-02 operating budget be approved, including the tuition refund policy and schedule and rates for academic tuition, segregated fees, textbook rental, room and board, and apartments as reflected in the document 2001-02 Operating Budget and Fee Schedules, July, 2001. The 2001-02 amounts are:

GPR* $1,094,383,564 32.65%

Academic Tuition 563,981,514 16.83%

Total GPR/Fees 1,658,365,078 49.48%

Other 1,693,064,579 50.52%

Total $3,351,429,657 100.00%

That the Executive Committee of the Board of Regents is authorized to approve changes resulting from final enactment of the 2001-03 state biennial budget and that the President is authorized to make final detailed allocations to reflect final legislative and gubernatorial action.

That, if the final budget contains significant additional unfunded costs or further base reductions/lapses beyond the $6.345 million in the Joint Committee on Finance version, the President is authorized to bring supplemental tuition increases offsetting these items to the Executive Committee of the Board of Regents for the 2001-02 academic year, and the Executive Committee of the Board of Regents is authorized to approve those supplemental increases so they may take effect in a timely manner.

Academic tuition for Minnesota Reciprocity students will be incorporated into the 2001-02 Academic Fees/Tuition Schedule upon receipt of final Minnesota tuition information.

*The GPR increase includes funding provided by the Joint Committee on Finance budget plus the full amount requested in the UW System Economic Stimulus Package.

In order to prepare for the new academic year, Regent President Smith noted, it is necessary to make budget decisions at this time, even though the Legislature has not yet completed its deliberations on the 2001-03 state budget. At this point, the Governor and Joint Committee on Finance have both approved funding increases for the workforce development initiative and portions of the Madison Initiative and the Milwaukee Idea, largely funded through tuition increases and a modest GPR increase. The Senate has approved the entire UW Economic Stimulus package. The Assembly has approved selected portions of the package, with a significant part of the funding coming through base reallocations and additional fees. The Assembly budget also contains other base reductions and unfunded costs. The Conference Committee currently is debating the level of support for the UW.

The good news, he pointed out, is that the Governor, the Legislature and the public are recognizing the economic challenges facing Wisconsin and recognizing that the UW is a major factor in stimulating economic growth and retaining graduates to fill the needs of the state’s workforce. It will be more difficult for the university to fulfill this role if it has to sustain an additional $11 million in base cuts --$5 million to the utility budget, as proposed by the Assembly, on top of the $6.3 million cut in the Governor’s budget. This would be a major challenge for UW campuses and would necessitate revisiting the commitment made to increasing enrollments to better serve the Wisconsin economy.

The UW , he stated, must maintain its place as the leading innovator for Wisconsin in biotechnology, engineering research, cancer and other health care research, and distance education, as well as maintaining the excellence of the university system while keeping educational costs affordable.

Noting that the Regents spend many hours deliberating and studying issues of educational policy and take their responsibility very seriously, Regent President Smith commented that it is discouraging when academic issues are legislated without consultation from the university on matters such as where to place budget cuts, what credits should be accepted and what research should or should not be allowed. Legislators can and should ask the Board to examine and respond to any ideas they have for a better university system, he noted, and in this light the Board would be discussing credit transfer and credits to degree issues at this meeting in response to legislative concern.

Presenting the 2001-02 annual budget, President Lyall noted that it is necessary to set tuition rates in July so that parents and students can receive their tuition bills in August and plan expenditures for the coming year. This requires making some assumptions about the level of funding that will be allocated to the UW in the final budget. Although there are significant differences among versions of the budget passed so far, the main differences relate to GPR funding of the Economic Stimulus Package and would have a negligible effect on tuition. While it was more difficult to know the level of GPR increases and base reductions, it would be necessary to make educated guesses and reserve flexibility to make modifications, if necessary, after the final state budget is determined.

Noting that an operating budget is really a statement of goals and principles for the institution, the President indicated that this budget expressed the following five principles:

1) Maintain one of the most accessible and affordable university systems in the nation;

2) Invest in the faculty and staff who represent the heart of the university;

3) Maintain the UW’s ranking as the most efficient system of higher education in the United States;

4) Encourage campus and community partnerships;

5) Increase the number of graduates entering the Wisconsin economy in high-tech, high-paying fields, partnering with state government to increase per capita income for everyone in the state.

It was anticipated that this budget will allow the UW to take steps to strengthen Wisconsin’s economy through the Economic Stimulus Package. There was encouraging support for the university in a number of key items that would provide for operating flexibility, new positions and funding for new initiatives geared toward economic development. President Lyall remained optimistic that state leaders will include substantial funding for the university’s Economic Stimulus Package in the final budget. Once the budget passes, allocations will be made on the basis of budget decision rules the Board adopted earlier in the year and additional rules for the Economic Stimulus Package contained in Appendix A to the budget. If changes to those rules are needed due to final budget action, Resolution 8403 directs the Executive Committee and the President to make appropriate modifications.

Turning to provisions of the state biennial budget, President Lyall indicated that, in addition what was outlined by Regent President Smith, the Governor included a much needed $7 million to help the university serve more students with distance learning. In the Assembly version, that money would be used to fill the state’s general budget deficit, leaving a number of the UW’s technology initiatives short of needed funding, including the Learning Innovations Center and connecting campuses to Internet II.

The Joint Finance Committee’s version of the budget contained an additional $57.4 million GPR/fees for new initiatives and cost-to-continue in the first year of the biennium. Including pay plan, that figure increased to $84.8 million GPR/fees. If the Legislature adds the Economic Stimulus package, that would amount to another $16.4 million. This also would restore the traditional funding formula for the coming year to one-third from tuition and two-thirds from GPR.

With respect to tuition, the proposal for the coming year is to increase resident undergraduate tuition by 7 percent at 24 campuses and 8.4 percent at UW-Madison and UW-Milwaukee. The 8.4 percent increases reflect special initiatives at the doctoral campuses and would be accompanied by commensurate increases in financial aid. These increases mean that students at the UW Colleges would pay $17 per month more, at the comprehensive campuses $20 per month more and at UW-Madison and UW-Milwaukee $30 per month more. The budget contains no new differential tuition initiatives.

The Senate version of the state budget provides for a 7% increase to the Wisconsin Higher Education Grant Program, the AOP Program and Lawton grants. In addition, UW-Madison and UW-Milwaukee’s budget initiatives build in an additional financial aid component to help needy students meet the extra cost.

With an 8.4% increase, UW-Madison’s tuition will remain almost $1,000 below its peers, ranking second lowest in resident tuition among Big Ten schools. UW-Milwaukee and UW-Comprehensives will remain about $600-$800 below their peers, and tuition for the UW Colleges will remain lower than tuition for the Wisconsin Technical College System’s college parallel programs.

State budgets throughout the Midwest have been hit by the nation’s economic downturn, causing all of UW’s peer institutions to increase tuition – some much more substantially than the UW proposal. Illinois will charge incoming resident freshmen 18.4% more than last year. Other tuition increases include more than 10% at the University of Minnesota, 9.5% at Ohio State, 7.2% at Iowa and 7.5% at Indiana and Purdue.

Therefore, the President pointed out, the UW’s proposed increases are in line with peers across the Midwest. In dollar amounts, UW tuitions proposed for next year range from $2,422 at the UW Colleges to $3,568 at UW-Madison. In comparison, a year of day care in Dane County costs close to $8,000. A new Apple Power Book laptop computer costs $3,100. A year of college parallel work at a WTCS campus costs $2,700, and a year of tuition at Ripon College costs $19,200. By any measure, she stated, tuition at UW campuses remains a bargain for students and for the people of Wisconsin.

Turning to non-resident tuition, President Lyall explained that higher non-resident rates help to maintain quality of education and student services in the face of 16-18% increases in the cost of health insurance, double digit increases in utility costs, unfunded state costs and charge backs. Those costs would otherwise have to be redistributed back to resident students.

A 9% increase is proposed for the UW-Madison Law School to help meet its special accreditation needs, including additional investment in library resources. Non-resident tuition increases at the UW-Madison Schools of Medicine and Veterinary Medicine will be held to 8.4% since non-resident tuition for those schools already is at a high level compared with peers around the country.

Segregated fees would increase an average of 7.66% at the 4-year institutions and by around 4% at the UW-Colleges. In a number of cases, students have voted to raise their fees to pay for facilities and programs on their campuses that they consider a high priority. For example, there is a $100 fee at UW-Green Bay to enhance student life and provide a new center for campus events, and there is a $50 fee at UW-River Falls to be set aside for the student contribution to a new student union building.

Room and board rates would increase an average of 5.2% for the coming year. These increases primarily reflect debt service, replenishment of reserves and residence halls construction.

The budget follows the UW tradition of internal reallocation to meet a number of needs. At the Board’s direction, the campuses reallocate annually to cover growing technology and distance education costs. This year, that reallocation will amount to $15.7 million, more than double the amount required under Regent policy. Noting that keeping up with technology and modernizing administrative systems have become increasingly urgent and expensive undertakings, President Lyall pointed out that the state has not been asked to fund these needs. Rather, this has been done with base reallocations.

In addition, UW campuses will reallocate over $30 million from base budgets to cover costs of inflation that are not funded by the state and over $26 million to fund growth in enrollment.

In addition, President Lyall pointed out, the state budget contains a $6.3 million reduction to the UW’s base budget. In exchange for the flexibility to manage those cuts, the UW agreed not to reduce enrollments by the 11,000-12,000 full time students that these dollars are now supporting. That is why, she emphasized, the flexibility to manage the cuts and the base budget is so important. The commitment not to reduce enrollment in the face of reductions of this size is likely to lower support per student for all UW students and will make future challenges in meeting academic quality standards more severe. Because UW institutions have not yet recovered from the major budget and faculty cuts of the mid-1990’s, this will be a particularly challenging task.

Regent principles for managing the budget reduction are directed at protecting enrollments. The Chancellors also sought to protect physical plant budgets and public service, since the Board has made both facility maintenance and service to communities and businesses a high priority.

Noting that one of the important principles of the university is to invest competitively in the faculty and academic staff who teach and mentor the students, President Lyall indicated that last December the Regents identified a 4.2% pay plan in each year of the biennium as necessary to bring faculty to market levels by the end of the biennium. In June, the Joint Committee on Employment Relations approved a 1% and 2% pay plan for state employees. The UW System also is authorized to set tuition at levels commensurate with the requested unclassified pay plan.

Because the budget must balance the pressing compensation needs for faculty and staff with the goal of keeping tuition moderate, it was proposed to phase in the pay plan increases for this fiscal year – with a 2.1% increase to take effect on July 1 and another 2.1% increase in January. While this delays reaching the market midpoint by six months, it permits balancing compensation and tuition commitments and keeping tuition increases for resident undergraduates at 7%.

Finally, the President stated, the budget and new initiatives it contains rededicate the university to the tradition of the Wisconsin Idea. New partnerships to energize the state and regional economies, initiatives to strengthen partnerships with K-12 and the technical college system, and programs that will produce additional graduates to meet the state’s need for highly skilled workers all are in keeping with the UW’s long tradition of helping to solve state problems.

The budget also cements new partnerships among UW institutions There are new admission agreements between UW-Madison and the UW Colleges and new program partnerships among the Comprehensive Colleges. There also are new degree completion programs between UW-Milwaukee and the UW Colleges, between UW-Platteville and UW-Fox Valley, and between UW campuses and the WTCS institutions.

In conclusion, President Lyall stated that these are outstanding examples of the many ways the UW System works to make the whole greater than the sum of its parts. As the UW System’s 30^th anniversary approaches, it will continue to be a priority to encourage more of these partnerships and to maintain the UW System as not only one of the most efficient systems of higher education in the nation, but a model for how a truly integrated system of higher education can benefit the citizens that support it.

In discussion following the presentation, Regent Krutsch remarked that one of the key responsibilities of the Board is the long-term stewardship of quality higher education. In the effort to maintain and expand access, she pointed out that it is important to consider the impact of these initiatives on the ability to protect educational quality.

President Lyall agreed that it is becoming more important to monitor whether there is sufficient basic support per student to deliver the academic quality to which students are entitled. While a commitment has been made not to cut enrollments in return for flexibility to manage the $6.3 million base budget cut, she indicated that if the final budget includes significant additional base reductions, it will be necessary to revisit Enrollment Management 21 goals.

Regent Krutsch observed that credits and time to degree affect affordability for students and families. Even though the target for credits to degree had been met, she commented that there is room for further improvement and that this would be a way to help maintain both quality and access.

Regent Mohs remarked that the division of financial responsibility between tuition and GPR is a subject that should continue to be emphasized. Noting that the UW highly benefits the state as well as individual students, he urged that the importance of the social compact with the state continue to be given high visibility, so that the Legislature and citizens can recognize the importance of their responsibilities in that partnership.

His observation during the budget process was that the Legislature understands the Economic Stimulus Package and how it could benefit the state. For excellent groundwork in communication with legislators on this subject, he credited Vice President Weimer, Margaret Lewis, David Miller, and the Badger Action Network, as well as effective leadership by President Lyall and Regent President Smith, along with individual Regents who had been in contact with legislators. Regent Mohs expressed the hope that they would find a way in the final budget to provide the needed funding.

Regent Olivieri expressed concern about any reduction in enrollment goals, even if there is an unfavorable budget outcome. Before considering lower enrollments, he would favor considering reallocation and outside funding. It is clear, he noted, that a great deal of reallocation is being done and it is likely that outside funding will be an increasingly important component of budget strategy in the future. One question that is often posed, he indicated, is why the rate of tuition increase should be higher than the rate of increase in the cost of living.

In reply, President Lyall indicated that, if the state contribution had been growing at the rate of inflation, it would not be necessary to ask students to grow their contribution at a rate higher than the rate of inflation. As the rate of increase in state resources to the UW has been reduced over the last five years, students have been asked to pick up a portion of that reduction in order to maintain enrollments, provide needed class sections, and meet other educational priorities. In order to hold down the portion charged to students, the UW has taken a number of measures, such as substituting instructional academic staff for some faculty. There is a long-term policy question, she noted, as to how much of that kind of substitution should take place. Another important point is that, because UW tuitions are low, the percentage increase may not be as helpful an indicator as the actual dollar amount.

Regent President Smith commented that the amount of reallocation done by the UW is not fully recognized. Coming into this budget, reallocation is about $20 million and exceeds $140 million over the past five years.

Regent Marcovich pointed out that the UW System’s efficiency of operation is by far the best in the country and outside sources of revenue are as good or better than most other institutions. The answer to the question of how to fund continuing access and quality, therefore, is state GPR money. He felt the general public does not realize that over the last 20-40 years, GPR support has declined from two/thirds to one/third of the UW’s budget and that legislative priorities have moved away from education. He urged increased efforts to expand public understanding so that citizens would be in a position to communicate with their legislative representatives and realign their priorities.

Regent Boyle complimented President Lyall and her staff for creating a clear and concise budget document that is easily read and understood. He considered it unfortunate that the faculty/staff salary adjustment package must be phased in, particularly in view of the high quality of education that they provide.

Regent Burmaster stated that she would vote against the operating budget because of the tuition increase that it includes. She considered it unfortunate that the Legislature has made tuition increases necessary and that the budget must be balanced on the backs of students. This, she felt, goes against the principles of access, opportunity and the Wisconsin Idea.

Regent Krutsch noted that the UW has one of the highest access rates and one of the lowest tuitions among peer institutions. This is evidence, she noted, of the state’s commitment to the UW over the years. Noting that elected officials are in a financial bind due to the national economic downturn, she observed that Wisconsin remains one of the highest taxed states in the country, which has an impact on the effort to attract new business and high paying jobs. It would help to preserve access and affordability, she commented, if more students were able to graduate in four years.

While she was disappointed to have to raise tuition, Regent Brandes stated, she also was disappointed with Wisconsin’s status as a high tax state. In her view, the proposed tuition increase was fair, especially considering that the UW is one of the finest academic institutions and is below average in terms of tuition. She also pointed out that businesses are paying interns from these institutions more than 7% above last year and that living costs of $8,200 per year at UW-Madison and $6,200 at the UW comprehensives compare very favorably with other institutions. Viewing the proposed tuition increase in the broader context of the state’s financial position, economic development, and other priorities, she considered the increase to be fair and intended to vote in favor of it.

Regent Schneiders expressed agreement with Regents Krutsch and Brandes. As a former legislator, she understood the dilemma of competing needs and limited resources. Over the years, she had noted a rise in the quality of UW institutions. Expressing a concern about Wisconsin’s position as a high-tax state, she commented that people should recognize the value they are receiving for the reasonable tuitions at UW campuses. She intended to vote in support of the budget.

Regent Axtell felt it was commendable for Regent Burmaster to speak out on behalf of constituents and in accordance with her standards. However, he questioned voting against the whole budget because of an increase in tuition, which represents only 1/6 of the budget. He considered it important that individuals help pay for their education, as it is one of the finest investments a person can make and an investment with one of the greatest returns. Even with the increase, tuition would be second lowest in the UW-Madison peer group.

Regent Burmaster explained that her vote against the budget was not a vote against the principles of quality and excellence that it reflected. Rather, it was a vote for protecting access and opportunity for all students, who are her constituency. While UW tuition seems like a good deal compared to out of state and private institutions, she observed, this kind of choice is not available to lower income Wisconsin families. She asked if the rate of increase in financial aid equals the increase in tuition.

President Lyall replied that the Senate version of the budget includes a 7% increase in the state’s financial aid programs. It is an important point, she emphasized, that affordability depends in part on the state’s willingness to keep financial aid available by increasing it along with the increase in tuition. Noting that low tuition subsidizes all students, including those who can afford to pay, she added that providing increased financial aid along with higher tuition, is a way of asking those who can afford it to pay a bit more. Those who cannot afford it will be subsidized by financial aid.

Regent Olivieri pointed out that it is the Board’s position that financial aid increases should parallel tuition increases.

Stating his pride in voting for this budget, Regent Mohs commented that there is no question that the education provided by the UW is an excellent bargain for students. This is demonstrated in part by the number of out-of-state students who compete or admission and are willing to pay nonresident tuition rates for the high quality education they receive. He was concerned, however, that state GPR support will continue to erode. Observing that each funding source must support its appropriate of the UW’s budget, he commented that it would be unrealistic to expect donors to pick up more of the state’s share, if GPR support falls short. Tuition increases, he added, should be incremental and predictable so that families can plan ahead and not be surprised by unexpected sharp increases.

Regent President Smith observed that there has been a two-decade trend of less and less state funding for the UW. If that trend line were projected into the future, there would be no state funding in another two decades. Stating that this trend needs to stop, he said that funding issues will be a priority for the Board in the coming year.

Stating that the UW System is one of the finest in the nation, Regent Jones noted the relationship between tuition and what students received in return – the skills and ability to succeed and make a difference in the state’s economy and society as a whole. Although no one wants to raise tuition, he pointed out, it is necessary for the budget to be funded and for the UW to operate and continue to be among the finest in the nation.

Regent DeSimone commended Regent Mohs for his efforts in working effectively with the Legislature. With all the different demands on scarce dollars, he commented, it is necessary to step up efforts to better explain why the UW needs those dollars and why education should be a top priority He supported working with the Badger Action Network and its hundreds of alumni who are willing to contact legislators on the UW’s behalf.

Regent President Smith added that the UW is making the case effectively that the proposed budget is an important investment in the future of the state. All initiatives in this budget had been framed in that way, showing exactly what benefit each will have. Led by Regent Mohs, the Board has been very active in making that case with the Legislature.

Chancellor Wells commended the Board for discussing the critical issues of GPR funding and increased financial aid. Noting that UW students generally graduate with around $13,000 in debt, he pointed out that decreased GPR funding has resulted in higher tuition, which has caused students to work increased hours and has lengthened time to degree for many. It is more and more difficult, he commented, for students from working class backgrounds to afford a college education. In addition to the need for GPR funding and increased financial aid, there is the issue of structuring of that aid, with a major shift from grants to loans for needy students.

Regent Marcovich thought it would be interesting to do a study comparing student debt and GPR support. His expectation was that debt would be found to increase as percentage of GPR support decreased.

Noting that no one would want to raise tuition or put off well-deserved faculty pay raises, Regent Gottschalk remarked, however, that this is a good budget in light of present day reality. While the trend toward declining portions of state support needs to be reversed in coming years, he emphasized that the UW remains one of the best university systems in the land and that its excellence must be continued. Therefore, he was proud to support this budget.

Put to the vote, Resolution 8403 was adopted on a voice vote, with Regent Burmaster voting against it.

- - -

REVIEW OF CREDIT TRANSFER POLICY

Presenting this item, Interim Senior Vice President Beaver noted that legislative budget deliberations included issues related to credit transfer, particularly with the Wisconsin Technical Colleges. It became clear that additional attention to this matter was desired, and it was suggested that the Board should begin a review of the credit transfer policy at this meeting.

A background paper provided to the Regents on this topic included a brief history of the policy, discussion of the transfer issue, an outline of current initiatives and options for discussion. It was explained in the paper that current transfer policies evolved over the past two decades Steps to enhance transfer opportunities have included:

· A Transfer Working Group was created in 1994 to review campus and system-wide transfer issues. In accordance with this group’s recommendations, the UW System has designated an officer in the Office of Academic Affairs to serve as “transfer ombudsman”, to coordinate the transfer process and help resolve transfer issues. In addition, a system-wide coordinating group was established that meets twice a year with the ombudsman to consider transfer issues at the system level. There are processes and appeals available to address transfer concerns that are voiced.

· Since 1989, UW institutions have been authorized by the Board to accept up to 15 credits in general education from technical college. Prior to that time, UW institutions could only accept general education courses from the three WTCS institutions that offered a college-transfer program: Milwaukee Are Technical College, Madison Area Technical College and Nicolet Technical College. The Board later authorized UW institutions to accept an additional two courses in either mathematics or science that are not defined within occupational courses as general education. Current policy, therefore, allows up to 21 general education credits. About 90% of standard general education courses with WTCS occupational programs are granted transfer credit by UW institutions.

· In response to a 1999-2001 biennial budget requirement, the UW and WTCS Boards reported to the Legislature on efforts to coordinate credit transfer from the WTCS to the UW. A number of initiatives are underway, including development of the Bachelor of Science degrees in Applied Science and Service Management at UW-Stout and an articulation agreement between UW-Parkside and Gateway Technical College in General Business. The written report included a list of transfer initiatives that are being implemented.

In considering this matter further, Dr. Beaver suggested a focused discussion on a number of options. These include:

1. Continue the existing process of periodically reviewing transfer policies and making incremental changes as appropriate.

2. Form a blue ribbon committee involving external members, as well as representatives of both systems. This committee would make recommendations on refining missions and roles of both systems.

3. Examine the merits of combining the two systems into a single higher education system.

In discussion following the presentation, Regent Mohs noted that a transfer initiative had been included in the current budget proposals by Representative Kreibich, a great friend of the UW, to ensure that monies are being spent as efficiently as possible. Expressing support for the first approach, Regent Mohs felt that this is the best way to continue moving the transfer process forward. He did not favor the third approach, having discussed the matter with leaders from the WTCS system who see their mission as being very different from that of the UW. It will be important, he pointed out, to demonstrate to the Legislature that the UW and WTCS continue to work hard to make the transfer as efficient and as beneficial to students as possible.

Regent Boyle remarked that, over the last 20 years, there has been increasing movement toward more liberal transfer policies between the two systems, leading people to question whether there are differences between their missions. Stating that there indeed are important differences, he felt the time had come to make more clear for the Legislature and the public the different missions of the UW and the WTCS, as a basis for any further discussions about transfer.

Expressing dissatisfaction with an incremental approach to transfer, Regent Olivieri commented that what exists today is not a seamless educational system, but a highly complicated relationship, including over 400 separate articulation agreements. He supported moving toward a more seamless system for Wisconsin. While it might be an overreach to speak of combining the two systems, he thought a relevant issue is the role of the UW Colleges as related to the Technical Colleges and their transfer functions. He felt this matter should be looked at on a system-wide basis.

UW Colleges Chancellor Bill Messner commented that the legislative proposal would lead to an inefficient use of resources, with duplication of effort by the Technical Colleges of the transfer-oriented general education curriculum offered by the UW Colleges, many times in the same communities. Noting that this issue is not unique to Wisconsin, he explained that it comes up wherever students complete technical programs, whether housed in technical colleges or community colleges, and then decide that they would like to obtain four-year degrees.

His concern was that what actually would result is a change in mission for the Technical Colleges, allowing them all to offer college-transfer programs exactly paralleling the UW Colleges. Before moving in that direction, he felt the issues of mission and structure of higher education in Wisconsin need to be addressed.

Regent Krutsch noted that the interest on the part of the Legislature and others is in opportunities for students and efficiency as well as quality of education. She thought it would be helpful to look at the transfer issue in a strategic manner, considering all relevant facts and bringing all the players into the discussion, rather than moving incrementally without having all relevant information at hand.

With regard to seamless transfer, she cautioned, it is important to insure that students who have credits transferred are academically prepared to succeed at the next level. In conclusion, she commented that this is the type of “big picture” issue on which a system-wide board should focus.

Regent Schneiders recalled that, when she was a member of the Legislature, she would get many complaints about problems with transferring credits, not only between the WTCS and UW, but among UW campuses as well. She thought legislators today remember those complaints, although since that time efforts to resolve transfer problems have been largely successful.

She suggested having a blue ribbon committee look at the issue from the perspective of missions and particularly whether there should be more collaboration between the WTCS and the UW Colleges on courses that would be acceptable toward a degree. The report of such a committee also could serve to educate the Legislature and public about this complex issue.

- - -

REPORT ON CREDITS TO DEGREE

Presenting the report on credits to degree, Interim Senior Vice President Beaver noted legislative concern about the resources consumed by the number of credits students take in pursuit of a degree. A provision in the Assembly version of the budget would require that at least 70% of UW System undergraduate majors be completed with 134 credits or less.

In 1994-95 Regents expressed concern about a similar issue and established a goal of reducing the number of attempted credits from 145 in 1994-95 to 140 in 2000-01. Progress made by the institutions in reducing credits to degree was detailed in the background paper for this agenda item. In considering this matter, Dr. Beaver cautioned, it is important to keep in mind the distinction between attempted credits (the number in which students enroll) and required credits (the number needed to complete a particular degree). Attempted credits include those that are successfully completed, as well as those that are not completed. Since all credits attempted require a commitment of resources, discussion has focused in this area, rather than in the area of required credits.

In 1995, the Board received a report on plans to reduce credits to degree. At that time, each institution was asked to establish a goal for reducing the average number of attempted credits by 2001. Approaches used by the various institutions were described in the background paper.

At its December 1996 and February 1997 meetings, the Board discussed the report of the Excess Credits Reduction Working Group, established as one outcome of the Board’s Study of the UW System in the 21st^t Century. The Board decided against implementing a surcharge for credits beyond a certain threshold, at that time defined as 150 credits. Instead, the Board asked for assessment of the impact of ongoing initiatives to reduce the average number of credits to degree, with the intention of reviewing the need for a surcharge when data for 2000-01 become available. Although this data will not be available until October 2001, data based on the 1999-00 graduating class shows that the UW System has exceeded the goal of 140 credits to degree, with an average of 139 credits. Concluding the presentation, Dr. Beaver noted that the background paper contains a list of policy issues that could be considered by the Regents in committee work during the coming year.

Regent Olivieri commented that this issue, as well as the transfer of credit issue, should be addressed by the Board, rather than by legislative action. He felt that average credits to degree could and should be reduced below 139. Resources that would be freed up by further reduction, he continued, should be used to increase student access and should not be removed from the UW budget.

Regent Krutsch commented that, like transfer of credits, this “big picture” issue has important implications in terms of affordability to families, GPR support, and what can be accomplished with available resources. This broad issue, she pointed out, includes clusters of issues and information that need to be understood and considered together in order to make good policy. If students took fewer credits, she noted, time to degree and student debt both would be reduced.

- - -

REPORT OF PreSIDENT OF the SYSTEM

Thanks to Al Beaver

President Lyall expressed deepest appreciation to Al Beaver for making possible an orderly transition to new leadership in Academic Affairs and for all the time he has spent with the University of Wisconsin System.

UW System 30^th Anniversary

President Lyall noted that 30 years ago this month the Legislature was involved in debating whether to merge the University of Wisconsin and the Wisconsin State Universities into a single university system under a single governing board. The proposal was so controversial that, when Governor Patrick Lucey came to the UW-Madison campus to meet with faculty, more than 600 attended and the meeting was broadcast live across the state. Within several months, the merger was enacted.

Thirty years later, the President continued, the UW System is one of the largest, most accessible and prestigious university systems in the nation. More than half a million students have graduated from UW institutions and have made profound impacts on Wisconsin and its communities.

During the coming year, there will be a number of occasions to celebrate the progress of UW System students, faculty, staff and alumni in recognition of the value of the UW to the State of Wisconsin and to its people individually.

The anniversary celebration will begin with a special dinner in Milwaukee on October 11, which will honor former regents, university officers, and public officials who were there at the time of the UW System’s founding. The anniversary will provide the opportunity to reconnect with those who have been part of the UW System’s history and success – former board members, state officials, chancellors, system officers, and employees – and invite them to help tell the story of the UW System. It also will be an opportunity to engage campus constituencies and the public in shaping the UW’s next thirty years.

Congratulations to UW-Superior

President Lyall congratulated Chancellor Erlenbach and UW-Superior for becoming Wisconsin’s designated member of the national Council of Public Liberal Arts Colleges which maintains top standards for the teaching of liberal arts around the country.

Another successful PK-16 Collaboration

It was reported by President Lyall that the UW System, the Wisconsin Technical College System, the Department of Public Instruction, the Educational Communications Board and the TEACH Board have come together in a consortium to ensure that instructional technology standards are aligned with pre-service teacher education throughout the state. In the past year, the consortium has supported educational technology access for K-12 schools, libraries, and colleges.

She announced receipt by the consortium of a $2.3 million grant from the U.S. Department of Education to work together in the coming year on the following needs:

1. Helping schools of education incorporate technology fully into their curricula for teacher training;

2. Creating an on-line virtual community of teachers and teacher trainees across Wisconsin’s public and private universities and technical colleges who can share best practices and learn what works in training teachers to use technology more creatively.

This is part of a sustained, long-term effort, the President noted, to turn out better teachers and to meet new state standards for instructional technology. It also represents another important collaboration with the Technical College System.

Dean Kempthorne Retires

President Lyall reported the retirement of Dion Kempthorne, Dean of UW-Richland, noting that he also had served the university as an extraordinarily able English professor and as a member of the 1963 Rose Bowl Badgers. She remarked that Dean Kempthorne has done an exceptional job of leading UW-Richland and that to date 20% of Richland County’s population has taken classes there.

Chancellor William Sewell Dies

President Lyall noted the recent death of Professor William Sewell, at the age of 91. Professor Sewell served as Chancellor of UW-Madison during the Vietnam War period. He is remembered also for his research and the Wisconsin Longitudinal Study – a survey that followed more than 10,000 Wisconsin high school graduates through their later life achievements.

- - -

REPORT OF EXECUTIVE GROUP FOR ON-LINE LEARNING

Introducing the report, President Lyall noted that the membership of the Executive Group for On-Line Learning (EGOLL) included Regent Axtell and Regent Olivieri, along with several Chancellors. The charge to the group was to work towards a policy of collaborative principles related to on-line education and to help the UW position itself better for on-line learning tasks that are larger than any one campus. To present the report, she called on Chancellor Messner, of the UW Colleges, who chaired the EGOLL group.

Chancellor Messner began his report by expressing appreciation to staff who worked with the EGOLL group - - Vice President Deborah Durcan, Associate Vice President Ed Meachen, Bob Jokish, IT Planning Director, and Michael Offerman, Director of Learning Innovations. As context for this report, Chancellor Messner recalled that in May 1996 the Board adopted a major policy document: A Study of the UW System in the 21st^t Century. One of the important findings of that study was: “Instructional technology and distance education are essential for expanding and improving the student learning experience for all students on campus and returning adults. The underlying goal is to use these tools to develop an enhanced student-centered learning environment and to remove time and place as barriers to learning both on and off campus.”

The 21^stCentury Study focused on two fundamental goals of on-line learning – promotion of student access and educational quality. In the years that followed, there was a national shifting of emphasis toward goals of saving money or even making money through on-line learning. What was found, however, was that efficiencies were harder to come by than had been thought and profits were particularly difficult to achieve. The focus then returned to the goals of access and quality.

Similarly, the EGOLL group’s report is based on these two goals, while not ruling out the possibility of realizing efficiencies in certain settings or even generating profits. The focus, however, is on student access and educational quality.

The vision stated in the report is as follows: “The University of Wisconsin System will develop a coordinated and collaborative approach to on-line learning with the goals of extending its educational reach, enhancing program quality, enriching on-campus education, and preparing all students, faculty and staff for learning in the future.”

The mission statement is as follows: “In the 21^st century, Wisconsin residents and students will increasingly expect the University to provide online opportunities as part of its core mission. In order to meet these expectations, UW institutions will work collaboratively to leverage their faculty expertise and other elements of online leadership to provide broadened access to world-class education in a seamless fashion.”

Chancellor Messner then outlined the following principles that had been adopted in accordance with the above mission:

1. The UW System’s approach to online learning will be consistent with the mission of the UW System, including overall plans for academic program development, Enrollment Management 21, meeting the economic development needs of the State of Wisconsin, the international focus of the UW and the state, and the Board’s principles on program array and duplication.

2. The UW universities and colleges will present their online learning offerings as a comprehensive, integrated and unified set of online course offerings to meet the needs of students and other clientele.

3. In order to prepare students for learning in the future, all students shall understand and use the technology skills characteristic of online learning courses during their collegiate career.

4. The UW will continue to develop quality standards, in line with the Board of Regents policy on Standards for Academic and Student Support Services in Distance Education Credit Courses, Degree and Certificate Programs and Guidelines for Distance Education Credit Program Array and Approval (approved in June of 2000), and provide necessary system-wide support for an online learning infrastructure.

5. The UW System will need to rely on a partnership of state resources and student tuition to support online learning and the associated infrastructure. The pricing of online programs should be consistent with the Board of Regents Principles for Pricing Distance Education Credit Courses, Degree and Certificate Programs approved in June of 1999.

Chancellor Messner then outlined the Action Plan growing out of those Principles:

1. A UW System Online Learning Policy Council will be established during academic year 2001-02 to assist the Senior Vice President for Academic Affairs in reviewing all campus plans for new online programs.

2. In the next two years, the UW System institutions will develop at least three pilot collaborative online degree or certificate programs.

3. In order to provide all UW students with exposure to online learning during their collegiate career, each UW System institution shall insure that faculty build these skills into every major offered at all UW institutions.

4. The UW System shall develop a University of Wisconsin Online Portal through which students can access all UW online programs and courses.

5. For the 2003-05 Biennial Budget, the UW System will develop a request to support the development of a coordinated and collaborative approach to online learning. Federal and private funds will also be sought to support this venture.

Regent Axtell pointed out that the UW was already listed in AARP’s Modern Maturity magazine as one of the top ten e-schools in the country, along with California, Indiana, Penn State, Rochester, UC-Berkeley, Maryland, Pennsylvania, and Washington. The mature population, he noted, includes a large group of potential online learners. With respect to what currently is available, he added that UW-Extension’s portal shows more than 150 online courses, but does not yet incorporate online registration and payment.

Regent Krutsch commended President Lyall for appointing the EGOLL group and Chancellor Messner for chairing it. The opportunity to craft this kind of policy, she remarked, is one of the important benefits of a university system. Expressing appreciation to Regent Axtell and Regent Olivieri for serving as members of this group, she felt it will be important to have Regent input on a regular basis as the process goes forward. She encouraged further opportunities for Regents, Chancellors and System staff to work together on big picture issues.

In response to a question by Regent Boyle, Chancellor Messner said the group recognized that duplication of effort among course offerings would not be a wise use of resources. While the group did not conclude that there should be no duplication at all, it was recognized as an issue and one that will be monitored by the group that will oversee next steps in the process.

Regent Boyle commented that it will be necessary to flesh out the meaning of collaboration as used in the report. Chancellor Messner agreed, noting that the report is a vision and broad outline – only the beginning of what needs to be done.

Regent Krutsch referred to Chancellor Messner’s comment that many of the on-line programs designed to cover costs or even make money for their institutions have not had the anticipated monetary success. She asked if there is a plan to review any UW online programs that have not met fiscal goals.

The Chancellor replied that the group’s focus was on future programs, rather than current ones. Existing programs, he added, have undergone both institutional and system scrutiny.

Senior Vice President Beaver added that there are not so many programs online at this time that there would be a concern about duplication among existing programs. There is work under way for a collaborative MBA program among four institutions: UW-Parkside, UW-Oshkosh, UW-La Crosse, and UW-Eau Claire. The challenge, he commented, will be to balance the need to allow appropriate institutional program development with concern about duplication.

Adoption of Resolution 8404 was moved by Regent Randall, seconded by Regent Axtell and carried unanimously.

University of Wisconsin Online Vision, Mission Statement, Principles

and Action Plan University of Wisconsin System Administration

Resolution 8404: That, upon recommendation of the President of the University of Wisconsin System, the Board of Regents approves the Vision, Mission Statement, Principles and Action Plan for "The University of Wisconsin Online".

- - -

ADDITIONAL RESOLUTIONS

Approval of UW Medical Foundation Bylaws

Dean Farrell of the UW Medical School, presented proposed bylaw changes and urged the Board to approve them. The proposal had been endorsed by 96% of voting clinical faculty. The proposed bylaws involved the following changes:

1. The size of the Board of Directors is reduced from 27 to 16 members, with the Medical School Dean appointed as chairman of the board. The downsized board includes representatives of the Physicians Plus Medical Group. The bylaws use an academic department model for the merger with the 225 physicians of Physicians Plus.

2. The flow of funds is changed to provide for increasing support for the academic mission of the Medical School. That will amount to $30 million in 2002 – double the amount of contribution in 1995. Another aspect is a required contribution within each department to the Research and Development Fund.

Regent Axtell inquired about funds to be provided from sale of 31 million shares of Blue Cross/Blue Shield stock, valued at about $7 per share. Dean Farrell indicated that the UW’s share of these monies would go to the UW Foundation and that a committee would be created to determine allocation of those funds. Thirty five percent of the funds are to be used for public health activities and sixty five percent for research and education focused on prevention of disease.

Upon motion by Regent Boyle, seconded by Regent Gottschalk, Resolution 8405 was adopted unanimously.

Approval of Bylaws Changes for University of Wisconsin Medical Foundation, Inc.

Resolution 8405: That, upon the recommendation of the President of the university of Wisconsin System and the Chancellor of the University of Wisconsin-Madison, the Revised Bylaws of the University of Wisconsin Medical Foundation, Inc. be approved.

Note: Regent Olivieri was not present in the room and did not discuss or vote on the Medical Foundation Bylaws agenda item.

The following resolution was adopted unanimously, upon motion by Regent Axtell, seconded by Regent Krutsch.

UW-Madison: Authorization to Recruit: Assistant, Associate or Full Professors, Interdisciplinary - Cluster #4

Resolution 8406: That, upon recommendation of the Chancellor of the University of Wisconsin-Madison and the President of the University of Wisconsin System, the Chancellor be authorized to recruit for up to seven Assistant, Associate or Full Professors, Interdisciplinary--Cluster #4, at salaries that may exceed 75% of the President's salary.

Upon motion by Regent Axtell, seconded by Regent Boyle, Resolution 8407 was adopted unanimously.

UW-La Crosse: New Program Authorization (Implementation):

Master of Software Engineering

Resolution 8407: That, upon recommendation of the Chancellor of the University of Wisconsin-La Crosse and the President of the University of Wisconsin System, the Chancellor be authorized to implement the Master of Software Engineering.

It was noted by Regent President Smith that the Board’s meeting schedule provides for cancellation of the August 23 and 24 meetings, circumstances permitting.

Adoption of the following resolution was moved by Regent Axtell, seconded by Regent Boyle and carried unanimously.

Cancellation of August meetings

Resolution 8408: That the Board of Regents meetings scheduled for August 23 and 24, 2001, be cancelled

- - -

closed session

The meeting was recessed at 11:07 a.m. and reconvened in open session at 11:25 a.m., at which time the following resolution, moved by Regent Randall, was adopted on a unanimous roll-call vote, with Regents Boyle, Brandes, Burmaster, DeSimone, Gottschalk, Gracz, Jones, Krutsch, Marcovich, Mohs, Olivieri, Randall, Schneiders, and Smith (14) voting in the affirmative. There were no opposing votes and no abstentions.

The Board arose form closed session at 11:50 a.m., having adopted the following resolutions:

UW-Green Bay: Approval for salary for Interim Provost and Vice Chancellor

Resolution 8409: That, upon recommendation of the Interim Chancellor of the University of Wisconsin-Green Bay and the President of the University of Wisconsin System, the salary for Carol A. Polis as Interim Provost and Vice Chancellor for Academic Affairs, be set at an annual salary of $115,000, effective July 1, 2001.

UW-Parkside: Approval of salary for Interim Provost and Vice Chancellor

Resolution 8410: That, upon recommendation of the Chancellor of the University of Wisconsin-Parkside and the President of the University of Wisconsin System, the salary for Kenneth L. Watters as Interim Provost and Vice Chancellor for Academic Affairs, be set at an annual salary of $115,000, effective July 9, 2001.

UW-Milwaukee: Authorization to Appoint: Interim Dean, School of Business Administration

Resolution 8411: That, upon recommendation of the Chancellor of the University of Wisconsin-Milwaukee and the President of the University of Wisconsin System, the Chancellor be authorized to appoint Professor V. Kanti Prasad as Interim Dean, School of Business Administration, at a salary of A$171,108.

UW-Madison: Approval of Salary: Women’s Basketball Head Coach

Resolution 8412: That, upon recommendation of the Chancellor of the University of Wisconsin-Madison and the President of the University of Wisconsin System, the base salary for Women’s Basketball Head Coach Jane Albright, be approved at an annual rate of $191,210, effective July 1, 2001, to take account of media and apparel income previously received form outside sources.

UW-Madison: Approval of Salary: Provost and Vice Chancellor

Resolution 8413: That, upon recommendation of the President of the University of Wisconsin System, the Chancellor of the University of Wisconsin-Madison be authorized to negotiate, subject to state law, a salary up to the mid-point of the Board of Regents 2001-02 Senior Executive Salary Range for Peter D. Spear as Provost and Vice Chancellor for Academic Affairs, with an anticipated effective date of October 1, 2001.

The meeting was adjourned at 11:50 a.m.

______________________________________

Judith A. Temby, Secretary of the Board