Board of Regents
May 2005 - MINUTES OF THE REGULAR MEETING
MINUTES OF THE REGULAR MEETING
of the
BOARD OF REGENTS OF THE UNIVERSITY OF WISCONSIN SYSTEM
Madison, Wisconsin
UW-Madison
Held in 1820 Van Hise Hall
Thursday, March 10, 2005
11:00 a.m.
- Vice President Walsh presiding -
PRESENT: Regents Axtell, Bradley, Burmaster, Davis, Gottschalk, Olivieri, Pruitt, Richlen, Rosenzweig, Salas, Smith, and Walsh. Regent Marcovich joined the meeting at 1:15 p.m. (13)
ABSENT: Regents Connolly-Keesler, Gracz, McPike, and Randall (4)
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REVIEW OF REGENT POLICY ON TUITION AND FINANCIAL AID
In the opening remarks, Associate Vice President Freda Harris noted that the presentation is a follow-up to the preceding month’s discussion of financial aid funding included in the Governor’s 2005-07 budget and the UW’s recommendations for changes to the Wisconsin Higher Education Grants (WHEG) formula.
One of the concerns was that the Board had a policy on moving tuition to the median of peer institutions and did not have a policy on holding the lowest income students harmless through financial aid. While the goal of bringing tuition to the median of peers was added to the Board’s tuition policy in 1990, it was removed in 1992 due to widening of the gap that resulted from lower tuition increases at the UW than at peer institutions. In 1992, the UW was limited in how it set tuition because it could not spend more than was included in the biennial budget, plus pay plan increases and fringe benefits. Today, the university can spend all the revenue it receives but still is limited in how much tuition can be increased for resident undergraduates. By statute, the Board cannot raise resident undergraduate tuition beyond the amounts provided in the biennial budget, amounts required for compensation and fringe benefits, funds to cover losses due to enrollment changes and amounts needed for state-imposed costs not covered by GPR.
The Board’s current tuition policy includes the following references to tuition and financial aid:
- Tuition and financial aid should balance educational quality, access, and ability to pay.
- Tuition increases should be moderate and predictable, subject to the need to maintain quality.
- GPR financial aid and graduate assistant support should increase at a rate no less than that of tuition.
Referring to the Board’s recent study on Charting a New Course for UW System, Ms. Harris noted that the Partnership with the State Working Group adopted access, retention and brain gain as three policy goals. As part of the 2005-07 biennial budget, the Board requested ongoing GPR dollars for financial aid to replace one-time auxiliary funds used for that purpose in 2003-05. The Board also asked for enough funds to increase grants to students of families with incomes below $46,000 by the same dollar amount as tuition in order to hold these students harmless from tuition increases.
The Governor’s budget provided $37 million for replacement of auxiliary funds, $16.3 million to match the percentage increase in financial aid to the percentage increase in tuition, and $4 million to increase WHEG in the second year above the statutory requirement. However, the budget did not include funding for the “hold harmless” request.
Beginning her presentation on student financial aid, Interim Associate Vice President Sharon Wilhelm noted first that almost 100,000 UW students received some type of financial aid in 2003-04, totaling nearly $700 million. Over three-quarters of the recipients were resident undergraduates, who received about 70% of all aid dollars. For these students, loans provided by far the largest source of aid, mirroring the national shift over time from grants to heavier reliance on loans. For every one dollar provided in grants and scholarships, two dollars were borrowed.
The primary source of financial aid is federal funding, which provided four out of every five dollars, coming primarily from the Pell grant program and the Stafford loan program. The second largest source (9%) was from state aid programs. The largest state program is the Wisconsin Higher Education Grant (WHEG), which provides grants to resident undergraduate students enrolled at least half-time. All awards are based on financial need, which is calculated through use of the federal needs analysis. One out of every five (almost 23,000) UW resident undergraduates received a WHEG award in 2003-04.
The Higher Educational Aids Board distributes these funds to students based on a formula, containing three elements that determine the size of the award: The equity level, the Expected Family Contribution (EFC), and an award rationing factor. The 2005-06 WHEG formula continues to tie the equity level to UW resident tuition and has a rationing factor of 50%. The formula attempts to meet the desire of the Board of Regents to hold low-income students harmless from tuition increases by providing a larger award amount to each recipient. The EFC is calculated through the federal needs analysis that determines the family’s ability to pay for college through a methodology that takes into consideration earnings, assets, family size, and number of students in college. The vast majority of financial aid, both federal and state, is distributed to students on the basis of their EFC. Ninety percent of WHEG recipients fall into the two lowest income quintiles.
Ms. Wilhelm explained that the recently approved WHEG formula would yield award amounts for 2005-06 in the range of $400 to $670 per award. However, recent changes in the federal needs analysis used to calculate the EFC will greatly impact the actual size of the WHEG awards. Preliminary analyses indicate that these changes will result in UW students’ EFCs increasing from $300 to $800, which means a decrease in financial aid eligibility and substantially smaller increases in WHEG awards. The highest estimate of $800 results in students’ WHEG increases in the range of $30 to $670 per award.
In response to the Board’s directive to look at additional financial aid options, a working group is investigating loan forgiveness programs and a second working group will be looking more broadly into ways to increase access and retention through financial aid. Recommendations from both groups will be submitted to President Reilly and the Board by the end of the year.
Regent Bradley then reported on a recent trip that he, President Reilly, and Assistant Vice President Kris Andrews made to Washington, D.C. to meet with members of the Wisconsin Congressional Delegation. Commending Ms. Andrews for her excellent work in preparation for these meetings, he indicated that every member they met with was familiar with the problem and how the EFC change will disproportionately affect Wisconsin students. Representative Green had been especially helpful in having a letter sent to the President from the Wisconsin Congressional Delegation in that regard.
While all members of the delegation agreed that the problem is a big one, their reactions to it varied. All said that the President’s proposal will be changed, but there still will be less money provided. In addition, Representative Sensenbrenner observed that he hardly ever heard from families about the issue of financial aid. To get an effective response, families need to contact their congressional representatives.
Representative Obey accepted an invitation to make a presentation to the Board, perhaps in the fall, on the national dialogue about federal support for public higher education.
In discussion following the presentation, Regent Salas noted that, while the Governor’s budget provides a substantial amount of funding for financial aid, it would not be enough to match tuition increase dollars and meet the Board’s request to hold harmless students in the lowest income quintiles. In response to a question by Regent Salas, Ms. Harris indicated that the amount needed for the hold harmless provision would be $26 million for the biennium, while the Governor’s budget provided $4 million. Regent Salas urged that efforts continue to find the money needed to meet that goal.
Regent Bradley inquired about what other alternatives might be available to find the additional $22 million.
Regent Olivieri suggested that tuition pricing would be one means that might be employed. He thought that if $22 million could be found in any of the statutorily permitted categories, there should be no prohibition against a pricing mechanism that would raise the needed funds.
In response to a question by Regent Pruitt, Ms. Harris indicated that a 5-1/2% tuition increase would amount to about $200 at the comprehensive universities and that the largest decrease in WHEG awards would be for students at the higher income end of grant eligibility.
Regent Rosenzweig asked if the Board would have authority to set differing levels of tuition, to which Ms. Harris responded that it would be necessary to look into whether that would be permitted.
Noting that the largest amount of financial aid comes from the federal government, Regent Rosenzweig referred to Congressman Sensenbrenner’s comment that he hears few concerns about financial aid. She asked if anything is being done to generate greater response on this matter.
In reply, President Reilly indicated that, in meeting with student press and student government leaders, he asked that students contact their representatives to let them know that this is a major problem.
Regent Davis remarked that parents also should be encouraged to contact the Congressional delegation, as they also can be very persuasive.
In response to a question by Regent Davis, Ms. Wilhelm explained that the rationing factor, a component of the WHEG formula, is a multiplier used to determine size of award. Ideally, it would be 100% in order to cover the amount of need left after subtracting the EFC. This year’s factor of 43% will increase to 50% in 2005-06.
Regent Davis stated her support for developing creative means of holding as many as possible of the lowest income students harmless from tuition increases.
In response to a question by Regent Walsh, Ms. Wilhelm explained that 90% of those in the two lowest income quintiles would be projected to receive WHEG awards between $113 and $669 in a worst case scenario. If the increase in the EFC is less, then the projected awards could increase by perhaps $200.
Regent Bradley asked if there would be consensus to ask staff to develop options for protecting those in the lowest income quintiles, preferably in time for the fall semester.
Suggesting that material be provided when possible in advance of meetings, Regent Olivieri stated his support for having options provided as soon as possible and being aggressive in using the Board’s statutory authority to address this matter. Part of the access problem, he pointed out, is “sticker shock” that may best be met through pricing mechanisms, not just through financial aid that depends on decisions of others. While it is important to address the matter in time for the fall semester, he also noted the importance of looking at longer-term implications.
In that many of those who file late for financial aid are lower-income students, he noted the need to understand the impact of the coming changes on those types of students as well. In response, Ms. Wilhelm indicated that it was expected that, based on EFC changes, dollars would be available to distribute to late filers.
While he supported examining the extent of the Board’s authority in this matter, Regent Gottschalk noted that more dollars would required and that he would not support adding that need to the $65 million in efficiencies already proposed in the Governor’s budget.
Regent Pruitt asked if it would be useful to examine the cost of increasing the rationing factor. Connie Hutchison, Executive Director of the Higher Educational Aids Board, responded that this had been done by HEAB and that information could be provided.
With regard to the “hold harmless” proposal, Ms. Hutchison indicated that the Governor took the Board of Regents’ request seriously and that the Governor’s Office, the Department of Administration and HEAB worked on it over the past several months. Their numbers indicate that the WHEG formula should provide enough money to hold harmless the lowest income students, and HEAB will continue to monitor how students are affected by the federal changes.
Regent Salas pointed out that the Partnership with the State Working Group found that Wisconsin ranks as one of the lowest states in terms of financial aid awards, with Illinois spending about three times as much and Minnesota twice as much. Ms. Harris indicated that this is the case because Wisconsin has traditionally been a low-tuition, low-aid state. Now, however, tuition has increased without corresponding increases in financial aid.
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Welcome to UW-Eau Claire Interim Chancellor Vicki Lord Larson
President Reilly introduced and welcomed Vicki Lord Larson, who was beginning her service as Interim Chancellor of the University of Wisconsin-Eau Claire
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2005 ACCOUNTABILITY REPORT: ACHIEVING EXCELLENCE
In opening remarks, President Reilly noted that this is the 12th year that the UW has issued its Accountability Report, having been the first in the nation to adopt system-wide accountability reporting. Many states continue to look to the UW as a model for their own accountability efforts. The report, he observed, is one means of making the operations of the university more transparent and is an important part of his commitment to openness. He called upon Interim Associate Vice President Sharon Wilhelm for further remarks about the report.
Recounting a brief history of accountability in the UW System, Ms. Wilhelm began by noting that the first UW System accountability report, “Accountability for Achievement”, was initiated in 1992, when Governor Thompson appointed a task force to suggest approaches to the development of an accountability document. The task force recommended 18 performance measures, which were adopted by the Board of Regents and became the basis for the first accountability report. The report was issued on a yearly basis for a mandated period of three biennia.
In 1999, the UW System undertook a thorough review of the accountability reporting process. The Accountability Review Task Force, appointed by President Lyall, recommended a revised set of goals and indicators for assessment of university performance, focused on two performance categories: Progress toward goals for specific student and institutional outcomes; and ways in which the UW provides positive campus environments that promote learning and student achievement. In 2000, the Board accepted the task force recommendations and authorized development of a new report entitled “Achieving Excellence”. These reports have been issued annually since that time.
In order to address both of the performance categories, she continued, it is necessary to augment outcomes data with findings from student and alumni surveys; and each edition of “Achieving Excellence” reports findings from a cycle of surveys, including the ACT Alumni Outcomes Survey and the National Survey of Student Engagement (NSSE). These surveys provide national benchmarks to which UW performance can be compared.
President Reilly pointed out that that the Accountability Report was designed to:
- Serve as a balanced scorecard that enables stakeholders to observe at a glance how the university is doing. Progress is measured against selected goals and benchmarks, as well as the strategic tradeoffs that must be made as resources shift.
- Help the UW strive for continuous improvement. Accountability indicators are tied to different institutional missions, as well as to system-wide goals. Performance gaps can be weighed against student, faculty, and state priorities to inform budget, management, and policy decisions.
Noting that the report is not intended to provide a comprehensive look at all aspects of the UW System’s mission, he indicated that there 41 additional reports on many elements not captured in the Accountability Report. These include reports on diversity, use of gift and grant funds, and university research, among others.
The report includes supplemental campus reports that show how each institution performed on four common measures: enrollment, retention and graduation, student involvement, and credits-to-degree. They also include measures specific to particular institutions that are developed from strategic planning processes for individual campuses.
Turning to context for the report, President Reilly referred to the difficult challenges faced by the UW System in the past year.
- State tax support for the UW System has declined to 26% of overall resources, down from 52% when the system was created in 1974. More than half (53%) of the total budget now comes from gifts, grants, and program revenues directly earned by UW institutions.
- Tuition has increased from 13% to 21% of the total UW budget during the same time period.
- The average cost to attend a UW institution, including tuition, fees, room, and board, has risen to $8,758 – up $842 over the previous year. While the UW remains affordable compared to public colleges and universities nationally, the average UW cost of attendance now equals 17% of a typical Wisconsin household income – up from less than 15% five years ago.
- Only 24% of Wisconsin adults have a bachelor’s or higher degree. While Wisconsin has above average college-going and graduation rates, this figure is three percentage points below the national average of baccalaureate degree holders in state populations. Increasing this number, the President, indicated, is one of his top priorities.
President Reilly then provided an overview of the reports findings, noting first that the UW system met 12 of 20 goals, with mixed success on four other goals. Successes included the following:
- The UW continued to provide immediate access for 32% of Wisconsin high school graduates.
- Participation by elementary and secondary students in the university’s multicultural and disadvantaged pre-college programs was increased, and a growing number of students were served online.
- The system-wide six-year graduation rate target of 61.5% was exceeded. Although the system-wide target for retaining students to the second year was not met, the UW remained ahead of national average rates of retention.
- Students gave the UW high marks on fostering critical thinking, planned learning experiences outside the classroom, and activities that promote good citizenship.
- The number of collaborative programs in the UW System has been expanded, extending educational opportunities to more students by effectively using fewer resources. Transfer opportunities with the Wisconsin Technical College System also have increased and the Committee on Baccalaureate Expansion identified even more opportunities for productive collaboration between the two systems.
Areas of continuing challenge, some directly related to availability of resources, include:
- Student rankings of the UW on the quality of academic advising and support are lower than the national average.
- Goals for ensuring adequate classroom technology and facilities maintenance have not been met.
- A number of important diversity goals have not yet been achieved. 1) Although more students of color are enrolled as new freshmen each year, this increase has not kept pace with the increase in the number of high school graduates of color. As a result, the percentage of students of color served by the UW immediately following high school has declined slightly and is behind the percentage of all students served at that same point in their educational career. 2) A gap persists between retention and graduation rates of students of color compared with all students. 3) More work needs to be done in preparing students for a diverse world in areas such as promoting study-abroad opportunities.
Stating that budget and enrollment pressures have forced some difficult compromises, President Reilly noted that the results are evident in performance on accountability goals. For example, the university has not been able to serve as many nontraditional students as desired, but has done well in preserving access for students right out of high school. Similarly, the building maintenance backlog has been growing, academic and student support services have been reduced, and the university is being asked to cut back even more in the latter area in the 2005-07 budget. But while these services have suffered, the university has done its best to hold harmless teaching and instruction and to protect the classroom experience.
The results of these compromises, he pointed out, have produced some startling new realities, including:
- Tenured and tenure-track faculty now teach only 61% of total student credit hours, down from nearly 70% during the last decade.
- The number of adult, nontraditional students in the UW has declined for the third year in a row and has slipped precipitously in recent years, declining from 40,000 in 1994 to 29,000 now.
- Instructional technology activities continue to be supported solely through base reallocation of campus budgets.
- Facilities maintenance continues to trail state standards but there are hopeful signs that in the 2005-07 budget the maintenance backlog will be reduced. Noting that work on streamlining the capital budget process is continuing, he observed that this and other improvements recommended in the Charting a New Course study will be essential in chipping away at maintenance backlogs in the future.
President Reilly then called on Chancellor Jack Keating to describe how UW-Parkside is working to achieve its accountability goals.
Noting that only 16% of the population of southeastern Wisconsin hold baccalaureate degrees, Chancellor Keating indicated that, although UW-Parkside did not meet its enrollment goals for a number of years, campus enrollments now are on target and growing.
With regard to progress toward increasing diversity, he reported that there has been significant growth in the number of students of color on campus – a 37% increase in six years, compared to an increase of four percent for white students over that same period.
Concerning non-academic responsibilities, the Chancellor indicated that 43.8% of freshmen and 51.6% of seniors spend 16 or more hours a week working off campus, a significantly larger percentage than at other UW comprehensive universities and in a national sample. In addition, 13.8% of freshmen and 25.8% of seniors spend 16 or more hours a week providing care for dependents – again a considerably larger percentage than found at other UW comprehensive universities or in a national sample.
In support of its longstanding commitment to serving adult students, UW-Parkside has a target proportion of 25% of undergraduates age 25 or older in its student population. The percentage currently is 20.8%
With respect to retention and closing the achievement gap for students of color, he noted a substantial drop in second year retention rates for both students of color and white students. Six-year graduation rates also lag behind targets. However, UW-Parkside ranks in the middle of peer institutions both in retention and graduation rates. In addition, UW-Parkside does well in retaining transfer students and graduates almost half of them – meeting or exceeding targets for retention and graduation of these students.
Participation in service-learning experienced a significant increase, from 594 in 1999-00 to 1,357 in 2003-04. In addition, the number of students involved in faculty research and community projects increased from 55 in 1999-00 to 185 in 2003-04.
To accommodate older students with work and family responsibilities, UW-Parkside offers 25% of it courses in evenings and on weekends, achieving its target in this area.
Finally, the campus experienced an increase in the number of grant and contract submissions that were funded, although the percentage remained below target.
For their diligence in compiling and analyzing the information presented in the Accountability Report, President Reilly expressed appreciation to Interim Associate Vice President Sharon Wilhelm and her team in the Office of Policy Analysis and Research – Todd Bailey, Gail Bergman, David Blough, Kelly Campbell, Sue Michalek, Jared Thomas, and Kevin Welch.
President Reilly then noted several additional challenges not directly measured in “Achieving Excellence”, but nonetheless of critical importance to better serving students and Wisconsin citizens. Some solutions, he indicated, are among the UW’s highest priorities in the current biennial budget:
- It will be necessary to maintain or improve upon the modest reinvestment provided for the university in the Governor’s budget.
- Competitive pay for faculty and staff is a pressing concern for recruitment and retention of even the reduced number of faculty and staff on UW campuses. The Governor has recognized this situation in his proposal for a faculty retention fund and domestic partner benefits, but more support for the pay plan is needed.
- Securing additional student financial aid is increasingly necessary to assist the neediest students, particularly in view of the decline in proportion of new freshmen coming from families with incomes in the lowest two quintiles.
In conclusion, the President remarked that success on these points, as well as the Accountability Report results, are only possible because of the exceptional efforts of chancellors, faculty and staff whose creativity and hard work has allowed the university to fulfill its missions of teaching, research and public service even in the toughest of fiscal times.
In discussion following the presentation, Regent Davis asked who is held accountable when targets are missed. In the private sector, she noted, achievement of goals has a direct effect on employee pay.
President Reilly replied that performance on the report’s goals is discussed with chancellors and addressed in performance evaluations. He noted, however, that many of the targets are “stretch” goals that may not be immediately attainable. If all goals had been met, he indicated, it would mean that they had not been set high enough. Chancellor Keating added that UW-Parkside was required to pay back some funding because of failure to reach enrollment targets.
Regent Smith inquired as to why access for nontraditional students has decreased.
In response, President Reilly indicated that a natural reaction is to concentrate on traditional students in times when services and programs must be cut and that nontraditional students generally require a higher level of services. He expressed hope that the recommendations of the Committee on Baccalaureate Expansion and improved transfer opportunities will help to increase the enrollment of nontraditional students. For example, he noted that the UW lags others in recognition of prior learning and that is one of the matters addressed in the COBE report.
Chancellor Sorensen pointed out that private institutions market strongly to nontraditional students.
Chancellor Wiley noted that there is less state subsidy for many courses aimed at adult students and that potential students sometimes are lost due to higher pricing.
Chancellor Miller commented that there is not much incentive to attract nontraditional students in the case of an institution like UW-Whitewater which already has exceeded its enrollment target. If more funding were available, there would be greater incentives to serve those students.
Chancellor Shepard added that the average age of students at UW-Green Bay has been declining. Due to greater demand, admissions have been closed earlier, leaving out part-time and nontraditional students who tend to apply later.
Regent Bradley noted that the UW offers relatively high access to students and has good rates of retention and graduation on an overall basis. Why then, he wondered, should the percentage of college graduates in Wisconsin be lower than in other states.
In response, President Reilly indicated that Wisconsin is close to last among states in attracting college graduates from other states. What is needed, he said, is to develop jobs that will attract graduates to Wisconsin.
Regent Salas expressed appreciation for addition to the Accountability Report of data on students of color, broken down by racial and ethnic group, and for data on closing of the achievement gap. In that regard, he suggested that it would be helpful to have a further breakdown of the Latino category.
He pointed out that six-year graduation rates for students of color are very poor, with 70% of Native American students and more than 60% of African American and Latino students failing to graduate in that time frame.
Noting that he served on the committee that had recommended the Accountability Report, Regent Axtell recalled that this committee had been established in response to a recommendation that the Board of Regents have the authority to set tuition. While the Accountability Report has been annually produced ever since, the university still has not been given the flexibility in the area of financial management that most peer institutions have. Stating that the UW can be proud of producing this excellent report, he suggested that the original goal of increased flexibility also be kept in mind.
President Reilly suggested that the Accountability Report be provided to legislators during visits with them in April.
Regent Olivieri commented that the Accountability Report is an excellent document that has improved over the years. In addition to providing accountability information to stakeholders and the public, he commented that it also should be used to drive the agenda setting process for the Board and that the report merits a full half-day of discussion.
Given the importance of a college education in today’s world, he suggested that the goal of serving 32% of Wisconsin’s high school graduates may be too low. Indicating that he was less concerned about a decrease in service to nontraditional students, he pointed out that the UW is doing well in serving its core of traditional students in tough budgetary times and that many nontraditional students have been choosing to enroll in the Technical Colleges.
In terms of future reports, he suggested that goals be set in more areas, such as distance education. He was pleased that six-year graduation rates were increasing, although much remains to be done, especially to increase graduation rates for students of color. He considered the use of surveys in the report to be helpful in measuring quality and was glad to see incorporation of Plan 2008 goals into the report. Finally, he noted that the UW continues to do well in student performance in post-graduate testing, but that a decline in passing rates on the nursing licensure examination might merit further discussion.
Given the importance of the Accountability Report, Regent Davis concurred that a half day should be allowed in order to provide more time to discuss it.
The meeting was recessed at 1:00 p.m. and reconvened at 1:25 p.m.
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2005-07 CAPITAL BUDGET RECOMMENDATIONS
Regent President Marcovich presiding
In opening remarks, Assistant Vice President David Miller observed that the Governor’s Capital Budget recommendations are very favorable to the UW System and that they recognize the need for significant new investment in academic and student facilities.
The budget provides funding for 29 major projects throughout the UW System, using state funded and program revenue borrowing, along with gifts and grants. It also provides significant general fund borrowing to make meaningful progress in maintenance and remodeling projects through the All Agency fund.
For major projects with general fund supported borrowing, the UW requested $231 million, and the Governor recommended $155 million. The gift and grant amount increased by about 12%, primarily to cover inflationary increases that occurred in 2004. All of the requested program revenue supported borrowing for 16 major projects was recommended.
In addition, the Governor proposed a significant new initiative called the Wisconsin Institute for Discovery, with funding for Phase I in 2005-07, using $50 million in BioStar funding and $100 million of gifts/grants and institutional funds. Total funding over five biennia is $267 million in state borrowing and $300 million in gifts/grants and institutional funds.
Noting that UW institutions’ requests for the next six years total $1.2 billion, Mr. Miller observed that, while there is significant need ahead, this budget moves forward many valuable projects in tight fiscal times.
As to major project funding sources, the Governor’s budget would provide 36% in general fund supported borrowing, 40% in program revenue supported borrowing, and 24% in gifts and grants. The UW would receive 85% of the total recommended state funding for major projects in 2005-07. While this percentage is the same as in 2003-05, the total dollar amount is much greater.
The budget also proposed significant investment in maintenance for the second biennia. Of the $220 million recommended for all state agencies, the UW could expect to receive between $110 and $130 million.
With regard to debt service, Mr. Miller indicated that, over the next three years, the UW is scheduled to retire about $70 million in general fund bonding that carries annual debt service of $5.8 million. He also noted the impact of avoided debt service through the aggressive fundraising done by UW institutions.
Turning to specific projects recommended in the budget, he showed slides of a conceptual rendering of the College of Business and Economics at UW-Whitewater and an aerial photo of the location of the Wisconsin Institute for Discovery. A drawing showed the location of the proposed University Square project, which would be privately developed, with the majority remaining private housing. The university would buy the part of the building in 2007-09 that would serve the University Health Service, a student activity center and Student Financial Services. UW-Stout’s 1960-era Jarvis Hall Science Wing would be remodeled, creating modern classrooms and labs and a significant new addition.
Mr. Miller explained that the Department of Administration based the 2005-07 budget on projected total general fund supported borrowing of $450 million for all state agencies for all purposes, which would result in debt service of about 4% of total projected general purpose revenue. With regard to the next two biennia, targets are allocated for projects enumerated in advance (at UW-Madison the Wisconsin Institute for Discovery and University Square, and at UW-Milwaukee the purchase and building of the Columbia Hospital project). DOA also projected system-wide projects such as utilities and classroom remodeling, targets for future projects that are not yet enumerated, and estimated maintenance. To preserve flexibility, the department recommended leaving $141 million unallocated in 2009-11.
The economic impact of the Governor’s Capital Budget would be over $1.3 billion in 2005-07. State investment of $315 million in borrowing would leverage $277 million in gifts, grants and program revenue. There would be a direct impact to manufacturers/suppliers of $279 million in purchases and to the labor force of 4,000 industry jobs, in addition to income, sales and corporate tax revenue to the state.
In conclusion, Mr. Miller observed that the Governor’s recommendation is very good news for the UW System. While needs still far exceed the funding available, students will see meaningful impacts of new and remodeled facilities. In summary, the budget makes higher education a clear priority for the state by investment in new facilities and maintenance, along with renovation of existing facilities.
In response to a question by Regent Richlen, Mr. Miller indicated that, while state funding would not over all the projects in the UW’s six-year plans, universities are coming up with creative options, as demonstrated in the UW-Milwaukee Kenilworth project and the UW-Madison University Square project.
Upon motion by Regent Axtell, seconded by Regent Richlen, the meeting was adjourned at 1:45 p.m.
Submitted by:
_________________________
Judith A. Temby, Secretary
MINUTES OF THE REGULAR MEETING
of the
BOARD OF REGENTS OF THE UNIVERSITY OF WISCONSIN SYSTEM
Madison, Wisconsin
UW-Madison
Held in 1820 Van Hise Hall
Friday, March 11, 2005
9:00 a.m.
- President Marcovich presiding -
Approval of the Minutes. - 3 -
REPORT OF THE PRESIDENT OF THE BOARD.. - 3 -
Discussion of the 2005-07 Biennial Budget with Representative David Ward.. - 3 -
RESOLUTION OF APPRECIATION: CHANCELLOR DON MASH.. - 6 -
Resolution of Appreciation: Chancellor Don Mash. - 6 -
Report on the February 18, 2005 meeting of the Higher Educational Aids Board.. - 8 -
Report on the March 9, 2005 meeting of the Hospital Authority Board.. - 8 -
REPORT OF THE PRESIDENT OF THE SYSTEM... - 8 -
Visits with Congressional Delegation. - 8 -
Award for Teaching Programs. - 8 -
Bill to Honor John H. Bradley. - 9 -
UW Role in National Program on the Liberal Arts. - 9 -
Jalisco-Wisconsin Consortium.. - 9 -
Senior Vice President Marrett wins Distinguished Service Award. - 10 -
Undergraduate Research Posters at the State Capitol - 11 -
REPORT OF THE PHYSICAL PLANNING AND FUNDING COMMITTEE.. - 11 -
Energy Efficiency Pilot Projects Report.. - 11 -
Building Commission Actions. - 11 -
UW-Green Bay Phoenix Sports Center Expansion and Remodeling Project.. - 12 -
UW-Madison: Demolition of Ogg Hall and Approval of Dayton Street Residence Hall Project - 12 -
UW-Platteville: Residence Hall Construction.. - 12 -
UW-Madison: Camp Randall Project.. - 12 -
UW System: Authority to Construct a Maintenance and Repair Project - 13 -
REPORT OF THE BUSINESS AND FINANCE COMMITTEE.. - 14 -
Annual Budget Decision Rules. - 14 -
UW-Madison: Sponsorship Agreement with Adidas. - 14 -
Socially Responsible Aspects of Timber Investing.. - 15 -
Annual Endowment Benchmarking Report.. - 15 -
Introduction to Real Asset Classes: Commodities. - 15 -
Cell Phone Audit Follow-up. - 16 -
2005-06 Annual Budget Allocation Decision Rules. - 16 -
Voting of 2005 Non-Routine Proxy Proposals. - 16 -
Sponsorship Agreement with adidas Promotional Retail Operations, Inc. - 17 -
REPORT OF THE EDUCATION COMMITTEE.. - 19 -
Review of Regent Policy on Tuition and Financial Aid.. - 19 -
Accountability Report.. - 19 -
Ongoing Work on Plan 2008. - 20 -
Allied Health Accreditation.. - 20 -
Gathering Stakeholder Input: Cooperative Extension Needs Assessment.. - 21 -
UW-Madison: Program Authorization (Implementation) M.A. in Women's Studies/Gender Studies. - 21 -
ADDITIONAL RESOLUTIONS. - 22 -
2006 Meeting Schedule.. - 22 -
UW-Madison: Approval of Salary: Dean of the School of Business. - 23 -
MINUTES OF THE REGULAR MEETING
of the
BOARD OF REGENTS OF THE UNIVERSITY OF WISCONSIN SYSTEM
Madison, Wisconsin
UW-Madison
Held in 1820 Van Hise Hall
Friday, March 11, 2005
9:00 a.m.
- President Marcovich presiding -
PRESENT: Axtell, Bradley, Burmaster, Davis, Gottschalk, Marcovich, Olivieri, Pruitt, Randall, Richlen, Rosenzweig, Salas, Smith, and Walsh
ABSENT: Connolly-Keesler, Gracz, and McPike
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Upon motion by Regent Gottschalk, seconded by Regent Richlen, the minutes of the February 10 and 11, 2005 meetings were approved as distributed.
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REPORT OF THE PRESIDENT OF THE BOARD
Discussion of the 2005-07 Biennial Budget with Representative David Ward
Regent President Marcovich introduced and welcomed Representative Ward, of Fort Atkinson, who represents the 37th Assembly District, near UW-Whitewater. Representative Ward has served in the Legislature since 1992 and has served on the influential Joint Committee on Finance since 1999. He is the Assembly’s Higher Education Liaison for that committee and also sits on the UW Hospital Authority Board.
Noting that Representative Ward has strong ties to the UW System, Regent Marcovich indicated that he and his wife, Jean, studied at UW-Platteville as undergraduates and that he earned his degree in agricultural economics in 1976 while commuting from Fort Atkinson where he was working to rebuild his family’s century-old farm that was destroyed in a devastating fire.
Representative Ward returned to Fort Atkinson after college to work alongside his father before taking over the management of Wardland, Inc., a 470-acre operation. He has received numerous awards for his commitment to Wisconsin agriculture and for his support of the UW, including a Friend of Extension Award in 2003 and the Distinguished Alumni award from UW-Platteville in 2001.
President Marcovich also introduced Char Rodriguez, Representative Ward’s assistant on the Joint Committee on Finance.
In opening remarks Representative Ward remarked that he and Senator Alberta Darling, who serves as the Senate’s Higher Education Liaison for the Joint Committee on Finance, both have strong UW ties; and he encouraged the members of the Board to keep in communication with them as the budget process continues.
The 2005-07 biennial budget, he emphasized, is a very difficult one with a $1.6 billion deficit, following the $3.2 billion deficit in the last budget. Therefore, more belt tightening will be necessary.
Expressing concern about the proposed budget, he indicated that, while growth of the economy will bring in $1 billion, proposed spending is double that amount; and legislators were hearing from constituents opposed to possible fee increases. He also was concerned about proposed borrowing of $1 billion over two years to cover ongoing costs and also about use of money from other accounts, such as the transportation fund, for such costs.
With regard to the budget process, Representative Ward explained that the committee is receiving briefing papers from the Legislative Fiscal Bureau and holding hearings around the state. After that, there will be agency briefings; and the committee will begin voting on parts of the budget early in April. The goal is to pass a budget that neither house of the Legislature will change drastically, so that it can be forwarded to the Governor in a timely way.
The intention, he said, is to create a budget with less spending, taxing and borrowing than in the Governor’s proposal. In doing so, the committee might go back to the base budget for some, but not all, agencies.
As to budget issues for the UW, Representative Ward identified the following:
- Noting that the Governor’s budget proposed tuition increases of five to seven percent, he said that, while there is concern about pricing students out of an education, the UW is still at the bottom of the Big 10 in cost of tuition. It would be unfair, he noted, to ask students to pay more and then have to spend more time to graduate. Therefore, it will be necessary to make sure that tuition increases are used to improve access.
- With regard to the pay plan, he commented that, while competitive compensation is necessary to attract and retain faculty, the state’s ability to pay must be kept in mind.
- Concerning the Governor’s plan to cut 10,000 state employees, he remarked that it is important to ensure that these reductions actually result in saving state dollars. Reducing program revenue-funded positions does not meet that criterion.
- Noting that the Governor’s budget plans to consolidate all state purchasing, he said there is concern about whether it would save money in the case of the university, which can get volume discounts through the Midwest Higher Education Consortium. There also is the question of whether the UW or the state will get the rebates.
- With regard to the proposed sale of state lands, he explained that the committee has in mind surplus lands not needed by the state. For example, it may have been necessary to purchase a whole farm in order to save a portion of environmentally sensitive land or to use part of it for highway purposes. He said that the UW should be at the table when deciding what should be sold.
In conclusion, Representative Ward thanked the board for the opportunity to speak and reiterated the suggestion that lines of communication be kept open.
Thanking Representative Ward for taking the time to speak with the board, Regent President Marcovich noted that the UW is aware of the challenges the state is facing and recognizes the problems that must be addressed.
Concerning sale of land, Regent Rosenzweig asked if the intention would be for proceeds from the sale of any university land to remain with the UW or to revert back to the state.
Representative Ward replied that the answer might depend on how the UW acquired the land but that it would be his goal for the proceeds to be used to help the university, although adjustments may then be required in other areas.
In response to a question by Regent Rosenzweig about legislative priorities for the budget, he indicated that K-12 education is the top priority and that another is shared revenue. Medical assistance also is a growing concern, consuming increasing amounts of money.
Noting that top concerns for the UW are financial aid, student access, and economic development for the state, Regent Walsh inquired about the feelings of legislative leadership with regard to investing in the university, which is the engine for driving economic growth.
Representative Ward replied that, if there were a budget surplus, they would want to invest in the UW, recognizing its role in promoting economic growth and providing economic centers for regions of the state. The difficulty, he said, is shortage of dollars. While the UW is a high priority, it must be balanced against other priorities; and, given the state’s current financial situation, he did not foresee making such an investment in this budget.
Regent Walsh asked that, if the state is not ready to make that investment, the board be given the flexibility to run the university like a business. Regent President Marcovich stated his concurrence with that request.
Representative Ward replied that he was not opposed to that proposal but that the board would need to keep in mind the responsibility that comes with increased flexibility.
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RESOLUTION OF APPRECIATION: CHANCELLOR DON MASH
Introducing the resolution, Regent Axtell recalled the impressive speech made by Chancellor Mash the preceding June concerning the board’s study on Charting a New Course for the UW System. In those remarks, he had pointed out that the UW System is at a crossroads and had urged that a strong case be made for investment in the university, using data and conveying a sense of history and vision. He had emphasized that “Wisconsin’s future depends on it.”
Regent Axtell then read the following resolution, which was adopted by acclamation, accompanied by a standing ovation.
Resolution of Appreciation: Chancellor Don Mash
Resolution 8980: WHEREAS, Dr. Donald J. Mash has served with distinction as Chancellor of the University of Wisconsin–Eau Claire since 1997; and
WHEREAS, during his chancellorship, the campus improved retention and graduation rates, increased admission standards, enhanced faculty/student collaborative research, study-abroad, service learning, and civic engagement; and launched the university’s first comprehensive fundraising campaign, which exceeded its original goal 15 months ahead of schedule and reset its goal to $50 million; and
WHEREAS, Chancellor Mash worked with students to realign differential tuition to provide a stable source of ongoing support for their priorities; and
WHEREAS, he has provided extraordinary service to the Eau Claire community and the entire Chippewa Valley region; and
WHEREAS, Mash’s achievements at UW-Eau Claire cap a student-focused, higher education career that spans five individual campuses and 40 years; and
WHEREAS, the Board of Regents of the University of Wisconsin System now welcomes Dr. Donald Mash as the UW System’s Executive Senior Vice President;
NOW THEREFORE BE IT RESOLVED that the University of Wisconsin System Board of Regents thanks and commends Dr. Donald J. Mash for his commitment to UW-Eau Claire and for his continued public service to the UW System as a whole; and
BE IT FURTHER RESOLVED THAT Donald Mash be recognized as Chancellor Emeritus with all of the rights, privileges, distinction and responsibilities such status may carry.
Remarking that his service at Eau Claire had been a labor of love, Executive Vice President Mash noted that it is a wonderful campus and that he was inspired each day by the excellent work done there, from teaching and mentoring to student support, grounds-keeping, and all the opportunities for learning offered outside the classroom. In thinking about leaving the campus and taking a position in Madison, he thought of it in terms of having an opportunity to take on a different role and do something more for the UW.
Looking back on his long career in higher education, he noted that he had been a first generation high school student. His parents had worked in factories, and he would not have considered higher education without the wisdom of his mother who steered him toward college from an early age. In his freshman year, he had a difficult time and almost quit because he was not ready for college and he knew that money was short for his family. But his mother would not let him leave for financial reasons, and he decided to return and ultimately succeeded.
He wondered how many students from low-income groups opt out of an opportunity to continue their education because of tuition “sticker shock” and how many families decide early on that the dollars would not be there for their children to go to college, without even knowing about the financial aid that is available.
How to nurture and bring along young people, he said, is the essence of public higher education when it is viewed as more than an individual benefit. Now, by default, the notion of whether public higher education is an investment in the greater good is being rethought; and tuition is being raised with no plan to protect the needy with financial aid. Noting that many students must borrow money for their education, he pointed out that students need to appreciate the value of what they are purchasing.
In conclusion, he emphasized that the more students the UW graduates and the more graduates who stay in the state, the better it is for Wisconsin. It is maximizing the potential of the state’s citizens.
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Report on the February 18, 2005 meeting of the Higher Educational Aids Board
A written report of the February 18th meeting was provided to the board.
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Report on the March 9, 2005 meeting of the Hospital Authority Board
The board received a written report of the March 9th meeting.
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REPORT OF THE PRESIDENT OF THE SYSTEM
President Reilly reported that he briefed the committees on the UW’s efficiency and effectiveness plans and his proposal for consolidating the Madison-based administrative offices of the UW Colleges and UW-Extension. He and President Dan Clancy of the Wisconsin Technical College System also reported on credit transfer between the systems. There was discussion about Representative Kreibich’s proposal to merge the freshman-sophomore UW Colleges with four-year universities, including comments by UW-Fox Valley Dean Jim Perry and Marinette County Board Vice Chair Ted Sauve. President Reilly shared his views about the plan in a letter to Representative Kreibich and Senator Harsdorf.
Visits with Congressional Delegation
Reporting on a recent trip to Washington D.C. with Regent Bradley and Assistant Vice President Kris Andrews, President Reilly noted that Regent Bradley had done an excellent job of representing the UW System and advocating for its priorities. Topics discussed included student financial aid and bringing more federal dollars into Wisconsin. He thanked Ms. Andrews for her fine work in arranging the visits and keeping the Congressional Delegation informed; and he indicated that students will be meeting with congressional representatives the following week.
The President extended condolences to Senator Feingold on the passing of his mother.
President Reilly reported that the Wisconsin Teaching Fellows and Scholars programs won the 2005 TIAA-CREF Theodore M. Hesburgh Certificate of Excellence from the American Council on Education. These professional development programs strengthen the understanding of student learning among early career and more senior faculty, enhancing undergraduate teaching and the classroom learning experience for students. The programs are system-wide in approach and impact; and they represent a diversity of disciplines and institutions.
He congratulated Lisa Kornetsky, Director of the Office of Professional and Instructional Development, Assistant Director Donna Silver, and Anthony Ciccone, Director of the Center for Instructional and Professional Development at UW-Milwaukee, who developed these exciting programs.
It was reported by President Reilly that Congressman Mark Green planned to introduce a bill that would honor the father of Regent Mark Bradley. His father, John H. Bradley, was one of the flag raisers at Iwo Jima during his service as a Navy corpsman in World War II. He earned the Navy Cross for his bravery in service, and his story was told in the best-selling book, Flags of our Fathers, by Regent Bradley’s brother, James. John Bradley also is remembered for his many years of community leadership and philanthropy in the Antigo community. Congressman Green is proposing to honor his service by designating a Department of Veterans Affairs facility in Appleton as the “John H. Bradley Department of Veterans Affairs Outpatient Clinic.”
UW Role in National Program on the Liberal Arts
President Reilly announced that the UW system is participating in a pilot program with the Association of American Colleges and Universities (AAC&U) that will make Wisconsin the first state to be part of a national initiative to champion the value of a liberal education. The decade-long campaign, titled “Liberal Education and America’s Promise: Excellence for Everyone as a Nation Goes to College (LEAP) will encourage students to consider a liberal arts education, while also underscoring how the liberal arts contribute to the nation’s health and the knowledge economy.
LEAP will complement the UW’s “Currency of the Liberal Arts” initiative, which promotes the liberal arts among UW students. The AAC&U has provided $17,000 to fund focus groups with high-school and college students, and prospects for further funding appear promising.
The President thanked Senior Vice President Cora Marrett and Rebecca Karoff, of the UW System Office of Academic and Student Services, for facilitating Wisconsin’s role in this new partnership.
President Reilly reported that he had signed an academic exchange agreement between the UW System and the University of Guadalajara in Jalisco, Mexico. The agreement will encourage exchange, collaborative research, and contacts among faculty, staff and students. Governor Doyle signed the agreement on behalf of the state as part of his trade mission to Mexico.
He expressed appreciation to Ron Singer, Evan Norris and Sal Carranza, of the UW System Office of Academic and Student Services, who led development of this agreement.
Senior Vice President Marrett wins Distinguished Service Award
President Reilly congratulated Senior Vice President Cora Marrett for earning the Erich Bloch distinguished Service Award from the Quality Education for Minorities Network. She won the annual honor for her “singular contributions to the advancement of science and to the participation of groups underrepresented in science through policies, programs and public service.” The network recognized her leadership of the federal Committee on Equal Opportunities in Science and Engineering, of the Directorate for the Social, Behavioral and Economic Sciences at the National Science Foundation, and of the Board for the Social Science Research Council.
Noting that student leaders had attended a dinner at Brittingham House, President Reilly indicated that each of them had an extraordinary story of student success to tell. For example:
Rachael Lehr, a third-year student at UW-Platteville, majoring in Chemistry-Criminalistics and German, has studied abroad in Germany three times. She also is a UW System Student Ambassador and serves as President of the Segregated University Fee Allocation Commission.
Matt Scheulke, a transfer student from UW-Platteville, will complete his undergraduate degree at UW-River Falls this semester. During his UW experience, Matt was both a McNair Scholar and a student body president.
Other examples of student excellence include: Carl Wesley, a UW-Platteville criminal justice major, who is a nontraditional student – married with three children. He transferred to Platteville after attending ITT in Greenfield and MATC in Milwaukee. In 2003, he was named a UW-Platteville Multicultural Student of the Year and recently received the American Multicultural Student Leadership Conference Change Maker award and scholarship. Last fall, he had a leading role in the campus production of “Blues for Mister Charlie,” which won Kennedy Center honors.
Kay Mikolajczak, a former All-American performer in women’s basketball and outdoor track and field at UW-Oshkosh, has been named by the NCAA as a 2005 recipient of Today’Top VIII Award, which honors distinguished student athletes for achievement in athletics, academics and community service. The only Division III honoree among the nation’s top eight student athletes, she graduated with a 3.93 grade point average in May with a major in biology and a minor if pre-physical therapy.
Dan Mitchell, a UW-Stevens Point senior music major, has been recognized in two national music composition competitions. He won the American Society of Composers, Authors, and Publishers H. Robert Reynolds Wind Ensemble Composers’ Competition and will have his winning instrumental piece, “The Dawning of a Soul,” performed by the National Wind Ensemble at Carnegie Hall on May 28th.
Undergraduate Research Posters at the State Capitol
President Reilly reported that, on April 7th, 100 UW students will participate in Posters in the Rotunda: A Celebration of Undergraduate Research. This event, in its second year, provides an opportunity to share the state-of-the-art research performed by undergraduates in a variety of disciplines with many stakeholders, including elected officials. These students, he noted, are not only developing innovative products and solutions, and sharing new knowledge, but they also are on the front lines of the next highly educated workforce for Wisconsin.
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REPORT OF THE PHYSICAL PLANNING AND FUNDING COMMITTEE
The committee’s report was presented by Regent Salas, Chair.
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Energy Efficiency Pilot Projects Report
The Physical Planning and Funding Committee met jointly with the Business and Finance Committee to hear a report about energy conservation opportunities proposed as pilot projects by four UW campuses to reduce energy expenditures. Strategies include: replacement of chemical fume hoods with low-air-flow fume hoods and renovation of related building ventilation systems; installation of additional electrical energy use metering linked to energy management systems to avoid high electrical demand charges; and installation of a wind generator to provide electrical power for use in campus buildings.
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Assistant Vice President David Miller reported that the Building Commission approved about $8 million for various projects at its February meeting: $3 million in GPR, $4 million in program revenue, and $1 million in gifts and grants. The commission also approved a lease agreement for the UW-Madison Graduate School Wisconsin National Primate Research Center for the AIDS research program and a second lease agreement for the UW-Platteville Residence Hall.
Regent Salas then reported on a number of resolutions that were passed by the committee.
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UW-Green Bay Phoenix Sports Center Expansion and Remodeling Project
This resolution would authorize construction of the UW-Green Bay Phoenix Sports Center Expansion and Remodeling Project and increase the budget by $2 million in gift funds.
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UW-Madison: Demolition of Ogg Hall and Approval of Dayton Street Residence Hall Project
This item would approve construction of the Dayton Street Residence Hall project with a budget increase of $1 million in program revenue-cash. The Dayton Street hall, along with the residence hall being constructed at Park and Regent streets, will replace the current beds in Ogg Hall, which will be demolished after the new residence hall is completed. In its place, recreational and green spaces will be created. The new hall will provide housing for 600 first and second-year students and 15 house fellows. Last December, the campus provided the committee with information showing need for additional housing for freshmen and sophomores.
Regent Salas asked if there was opposition to the project and was told that none was expressed, although there had been some opposition from private developers previously. The committee was concerned about meeting the needs of first and second-year students, who do better academically if they live in residence halls.
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UW-Platteville: Residence Hall Construction
This resolution would grant authority to construct a residence hall site utility extension project to provide the required utility extensions for the proposed engineering building and the new student residence hall which is expected to be ready for occupancy in August 2006. The project would extend steam, condensate, power, and signal utilities, as well as fiber optic and coaxial cables to the site boundaries.
Currently, Regent Salas pointed out, UW-Platteville has nine residence halls, all constructed over 30years ago, which are at overflow capacity. It was believed that a new hall could be filled even without the Tri-State Initiative.
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UW-Madison: Camp Randall Project
This resolution would authorize a budget increase of $2 million in gift funds for the Camp Randall project to provide an upgrade to the press box area beyond its original scope and to replace the existing elevator to the press box with a new ADA compliant elevator, as well as to expand the stadium security booth for better crowd management.
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Regent Salas moved adoption of the following resolutions by the Board of Regents as consent agenda items. The motion was seconded by Regent Gottschalk and approved on unanimous voice vote.
Resolution 8981: That, upon the recommendation of the UW-Green Bay Chancellor and the President of the University of Wisconsin System, the Design Report be approved and authority be granted to (a) construct the Phoenix Sports Center Expansion and Remodeling project; and (b) increase the project budget for an estimated total project cost of $32,000,000 ($7,500,000 General Fund Supported Borrowing, $15,000,000 Program Revenue Supported Borrowing, and $9,500,000 Gift Funds).
Resolution 8982: That, upon the recommendation of the UW-Madison Chancellor and the President of the University of Wisconsin System, the Design Report be approved and authority be granted to: 1) construct the Dayton Street Residence Hall project; 2) demolish Ogg Hall and create new recreational space; and 3) construct new green space as part of the East Campus Pedestrian Mall on the campus of the University of Wisconsin-Madison for a total project cost of $35,900,000 ($34,900,000 Program Revenue Supported Borrowing and $1,000,000 Program Revenue Cash).
UW System: Authority to Construct a Maintenance and Repair Project
Resolution 8983: That, upon the recommendation of the President of the University of Wisconsin System, authority be granted to design and construct a New Residence Hall Site Utility Extension project at an estimated total project cost of $1,652,000 PRSB – Utilities Repair & Renovation funding.
Resolution 8984: That, upon the recommendation of the of the UW-Madison Chancellor and the President of the University of Wisconsin System, authority be granted to increase the budget of the Camp Randall Stadium Expansion/Renovation project by $2,137,000 Gift Funds, for a revised total project cost of $109,442,900 ($85,104,900 Program Revenue Supported Borrowing, $11,538,000 Gift/Grant Funds, and $12,800,000 General Fund Supported Borrowing).
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REPORT OF THE BUSINESS AND FINANCE COMMITTEE
Regent Bradley, Chair, presented the committee’s report.
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Associate Vice President Freda Harris briefed the committee on allocation rules for the 2005-06 annual budget that have been recommended by President Reilly in consultation with the chancellors. President Reilly told the committee that there are two efforts under way that could influence allocations in the future: 1) The Integrated Planning Working Group will be looking at alternative funding models; and 2) a group of chief business officers and provosts is reviewing administrative functions, including those that are performed by System Administration and by the campuses. Therefore, the decisions rules to be acted upon at this meeting are for the first year of the biennium only.
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UW-Madison: Sponsorship Agreement with Adidas
Regent Bradley reported that the committee heard from representatives of UW-Madison and Liana Dalton, a student representing a joint faculty/student committee. She voiced concerns about adidas’ labor policies in foreign countries. Vice Chancellor Darrell Bazzell reported that the committee would be notified of any ongoing concerns throughout the term of the contract, especially any violations of the university’s code of conduct. The contract provides that access be given to records by UW-Madison but not by the public. The committee was satisfied that UW-Madison would monitor those records carefully.
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Socially Responsible Aspects of Timber Investing
At the last meeting, Assistant Trust Officer Doug Hoerr had briefed the committee on timber as a potential new asset class for allocation. Regent Bradley had expressed concern that timber investments could be sold to companies that would harvest the timber in an environmentally unsound way and cautioned that the committee would need to be assured that companies apply due diligence to prevent this from occurring if UW System trust funds were to be invested in timber.
Mr. Hoerr invited GMO, one of the UW System’s current investment managers that also provides timber investing, to address the committee on the due diligence that they apply to investments in timber. Eva Gregor, of GMO, gave an introduction to timber investing and the efforts that their company gives to ensure socially responsible investing. Professor Ray Guries, Chair of the UW-Madison Department of Forest Ecology, commented on the trend by organizations to certify that timber is handled in an environmentally responsible manner and noted that this would be a good way to ensure appropriate stewardship regarding timber investments.
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Annual Endowment Benchmarking Report
Assistant Trust Officer Doug Hoerr reported on the Annual Endowment Benchmarking Report prepared by the National Association of College and University Business Officers. UW System Trust Funds’ true endowment (long term fund only) was valued at $276 million as of June 30, 2004.
While the Trust Funds’ investment return exceeded the average peer performance in fiscal year 2004, performance has been comparable over longer time frames. Mr. Hoerr noted that the biggest difference is the UW’s under-weighting in alternative investments.
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Introduction to Real Asset Classes: Commodities
Assistant Trust Officer Doug Hoerr led an introductory discussion of commodities, noting that an upcoming asset allocation study may recommend that a small portion of the Trust Funds Long Term Fund be invested in this asset class.
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Vice President Debbie Durcan reported that the provosts and chief business officers met jointly to develop guiding principles and to identify major areas for further study, leading to a system-wide administrative cost reduction plan. The group brainstormed specific ideas for cost reductions, ranging from adopting a common academic calendar, to regionalizing the internal audit function, to centralizing admissions.
Seven work groups, including both System Administration and campus staff, are being formed to further develop cost-saving proposals in targeted areas. The groups will begin their work later in the spring and conclude by early fall. Their recommendations will be vetted with the chancellors and then reported by President Reilly to the Board of Regents
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It was reported by Vice President Durcan that, at the end of February, the Legislative Audit Bureau issued a limited scope review of cell phone contracts and usage by state and university employees. Two-thirds of employees had cell phone usage of less than $20 per month; however, LAB found 386 persons with monthly bills greater than $100 per month, over 200 of who were university employees. Ms. Durcan indicated that the UW agrees with all of the LAB findings, and the Office of Operations Review and Audit will soon be releasing a draft report entitled “Review of UW Cellular Phones,” which will be reviewed by the Business and Finance Committee later in the spring.
Regent Bradley remarked that it will be necessary to get cell phone users the right contracts in order to minimize costs. Where personal usage was found, those amounts have been reimbursed.
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Adoption by the Board of the following resolutions, which had been approved by the committee, was moved by Regent Bradley and seconded by Regent Pruitt.
2005-06 Annual Budget Allocation Decision Rules
Resolution 8985: That, upon recommendation of the President of the University of Wisconsin System, the Board of Regents approves the 2005-06 annual budget allocation decision rules. If subsequent legislative action modifies either the first year funding increases or reductions noted in the rules, the UW System would distribute the changes according to the principles set forth in Sections I and III.
Voting of 2005 Non-Routine Proxy Proposals
Resolution 8986: That, upon recommendation of the President of the University of Wisconsin System, the non-routine shareholder proxy proposals for UW System Trust Funds, as presented in the attachment, be voted in the affirmative.
Sponsorship Agreement with adidas Promotional Retail Operations, Inc.
Resolution 8987: Chancellor of the University of Wisconsin-Madison, the Board of Regents accepts the Sponsorship Agreement with adidas Promotional Retail Operations, Inc. which will provide, among other things, shoes, equipment, and apparel to the University of Wisconsin‑ Madison intercollegiate athletic teams, certain cash compensation, and enhanced licensing opportunities.
Regent President Marcovich called on UW-Madison students Joel Feingold and Liana Dalton, who had requested permission to speak to the Board about the adidas contract.
Mr. Feingold explained that the concern is that adidas contracts with sweatshops and that the Workers Rights Organization has no oversight. In addition, the Board of Regents is not privy to company records; only the chancellor or his representative is able to view them. The students were asking that disclosure by the company be made public.
Ms. Dalton commented that workers’ rights are being violated by addidas. For example, she said that the company engaged in union busting in Indonesia, closed its plant there and moved operations to China. She argued that adidas should make public disclosure of its facilities, wages and production volume. In addition, she urged that the Workers Rights Organization be included in the agreement.
Regent Bradley indicated that the student comments were consistent to arguments made to the committee the preceding day. The tension, he explained, occurs because the company wants to disclose information to a designee of the Chancellor, not to the public at large. Complaints can be made to the Chancellor’s designee and the contract can be terminated if there are material violations. Noting that full disclosure to the public would be an unusual step for a company to take, he said that the Business and Finance Committee was satisfied that UW-Madison would inform the Board of Regents of any violations.
Regent Davis remarked that students felt it would be more meaningful if the Workers Rights Organization were informed. She also thought that informing the Board of Regents would be helpful.
Regent Randall inquired about whether there was provision for academic support of student athletes in the contract, to which UW-Madison Vice Chancellor Darrell Bazzell replied that the university receives royalties of $800,000 to $1 million, which are spent for scholarships, half for the Athletic Department and the rest for general scholarships.
Regent Walsh asked if the provision on disclosure of information to the university was a new addition to the contract. Casey Nagy, Executive Assistant to the Chancellor replied that addition of that provision had been negotiated with the company over the past year.
In response to a further question by Regent Walsh, Mr. Nagy explained that the Workers Rights Organization is an entity with which UW-Madison works to monitor production when violations are found and to obtain resolutions. The organization is not part of the university’s budget.
Regent Walsh asked if information from adidas is subject to the open records law, to which Mr. Nagy replied that any requests would have to be evaluated under terms of the contract.
Regent Olivieri asked if there was a plan to review the company’s performance and records periodically, to which Mr. Nagy responded that there will be regular visits to review the company’s books and there will be immediate access to appropriate records if there are any complaints.
In reply to a further question by Regent Olivieri, Mr. Nagy indicated that unfettered access by the Chancellor is an extraordinary concession by the company. Noting that the industry is an exploitative one, he said the university had worked to find a responsible partner and believes that adidas is as good a company as could be found for this purpose. He added that the Workers Rights Organization has sometimes been satisfied in their dealings with the company.
At the request of Regent Richlen, Resolution 8987 was removed from the consent agenda.
In response to a question by Regent Richlen, Mr. Nagy indicated that this was the first time full disclosure had been included in the contract. Regent Richlen remarked that records open to the public would create the transparency that students want.
Regent President Marcovich noted that this is an improvement on the first contract and that, if the university pushed for further disclosure, there probably would be no contract with adidas. Noting that the university would have an absolute right of inspection, he believed that staff should be trusted to make the appropriate reviews and report to the Board.
While reporting to the Board is not part of the contract, Regent Bradley indicated that the Business and Finance received assurance from Vice Chancellor Bazzell that any violations would be brought to the Board.
Mr. Nagy stated that full transparency is the ultimate objective, but that steps need to be taken toward that goal. In his view, the disclosure provided in the contract constitutes a huge step forward.
Regent Marcovich said that his vote for the contract would not be a vote against the rights of workers. Instead, he felt this type of contract provides the best way to monitor company performance in that regard.
Chancellor Wiley thanked the students for their comments. He concurred that it is an exploitative industry and stated that the university will monitor carefully. He pointed out that the transparency contained in the contract is the best that any university has negotiated.
Regent Randall stated that he would vote against the contract because it lacks provisions for academic support of athletes. He said that he would be better satisfied if such a provision could be added.
Chancellor Wiley indicated that he would not want the company involved in deciding how the university should spend its royalties.
Regent Burmaster said that she would like to see access by the Board of Regents included in the contract.
Put to the vote, Resolutions 8985 and 8986 were adopted on a unanimous voice vote.
Adoption of Resolution 8987 was moved by Regent Davis, seconded by Regent Smith, and adopted on a roll-call vote, with Regents Axtell, Bradley, Davis, Gottschalk, Marcovich, Olivieri, Pruitt, Rosenzweig, Smith, and Walsh (10) voting in favor of the resolution, and Regents Burmaster, Randall, Richlen, and Salas (4) voting against it.
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REPORT OF THE EDUCATION COMMITTEE
The report was presented by Regent Olivieri, Chair
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Review of Regent Policy on Tuition and Financial Aid
Regent Richlen informed the committee that students are very mobilized to oppose the federal budget’s proposed cuts to student aid. At least 85 students from 10 UW campuses planned to spend their spring breaks in Washington, D.C., lobbying federal officials and congressional representatives. The point was made that it would be helpful if parents also could be mobilized.
Noting that efforts are being made in other states to make it possible for low-income students to graduate without debt, Regent Oliveiri indicated that UW-Madison has explored these plans but concluded that it would not be possible at this time, given the way the budget is constructed, to implement such a program in Wisconsin. However, he pointed out the importance of sending the message to low-income families that college is affordable and finding mechanisms to assist them.
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In discussion of the Accountability Report, the question was raised as to whether nontraditional students should be defined by factors other than age alone.
There also was discussion of revising goals and whether those that are being met should be increased in order to stretch efforts, while others might be revised downward to make achieving them more realistic. The goals are being re-examined to see if adjustments are in order.
With regard to pre-college programs, the committee was informed that efforts have been made to make the content more related to academics and success in college.
The committee also asked if the Accountability Report could revise the number of graduates system-wide to include transfer students. Currently only first-semester freshmen who complete their degrees are counted. At some institutions, like UW-Superior, transfers constitute a large number of students.
Finally, there was discussion of using the Accountability Report to provide future issues for the Education Committee agenda.
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The committee was informed that work to refine the campus plans was continuing.
There was discussion of conducting an ongoing system-wide climate study and having the results incorporated into the Accountability Report
Also included in the report would be the diversity report card that is being developed for presentation to the board in June. There was discussion of what should be included in the report, including the Bensimon method. The overall purpose is to identify barriers to student achievement so that they can be more effectively addressed.
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Regent Olivieri reported that a resolution on this matter had been drafted, but he asked that the chancellors have an opportunity to react to it before it came before the regents.
The committee heard input from provosts, with UW-Madison Provost Peter Spear expressing the feeling, shared by Chancellor Wiley, that there is little that can be done by the board or the institutions to have an impact on accreditation agencies.
The board, however, can speak to the matter of credits-to-degree and can ask that allied health programs continue to be monitored to make sure that these requirements are kept to a minimum.
It was noted that UW representatives, along with those from other institutions, serve on accrediting organizations and that they might be asked to take a strong stand with regard to this matter.
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Gathering Stakeholder Input: Cooperative Extension Needs Assessment
In this presentation, it was noted that Cooperative Extension, which operates in all 72 Wisconsin counties, is an excellent means of stretching the UW’s educational impact across the state. Mechanisms were described that are used to obtain feedback from the communities that it serves.
Questions were raised about the consolidation between UW-Extension and the UW Colleges, and President Reilly reported that feedback on this initiative has been positive.
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The committee heard second readings of the proposed M.A. in Women/ Gender Studies at UW-Madison and the consortial Doctor of Audiology program at UW-Madison and UW-Stevens Point.
With regard to the Doctor of Audiology, there was further discussion of credits and time to degree, as well as the cost of the additional year and the year of externship.
The committee approved both programs.
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Adoption of the following resolutions was moved by Regent Olivieri, seconded by Regent Axtell, and carried on a unanimous voice vote.
UW-Madison: Program Authorization (Implementation) M.A. in Women's Studies/Gender Studies
Resolution 8988: 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 implement the M.A. in Women’s Studies/Gender Studies.
Resolution 8989: That, upon recommendation of the Chancellors of the University of Wisconsin-Madison and the University of Wisconsin-Stevens Point, and the President of the University of Wisconsin System, the Chancellors be authorized to implement the Consortial Doctor of Audiology.
Regent Salas commented that he was pleased with approval of the Women/ Gender Studies program, recalling that these types of programs, along with ethnic studies programs, emerged in the 1960s and 1970s as a result of student demands. He urged that more of these programs be established and noted that they are helpful in attracting and retaining faculty and students of color.
With regard to the UW-Madison program, he pointed out that that there is no comparable program in the state or the Midwest.
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Adoption of the following resolution was moved by Regent Axtell, seconded by Regent Bradley and carried unanimously on a voice vote.
Resolution 8990: That the attached meeting schedule for 2006 be adopted.
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At 11:50 a.m., the following resolution, moved by Regent Walsh and seconded by Regent Smith, was adopted on a roll-call vote, with Regents Walsh, Smith, Salas, Rosenzweig, Richlen, Randall, Pruitt, Olivieri, Marcovich, Gottschalk, Davis, Bradley, and Atxell (13) voting in the affirmative. There were no dissenting votes and no abstentions.
Resolution 8991: That the Board of Regents recess into closed session to confer with legal counsel, regarding pending or potential litigation, as permitted by s.19.85[1][g], Wis. Stats, to consider a salary adjustment at UW-Madison, as permitted by s.19.85[1][c] and [f], Wis. Stats. and to consider honorary degree nominations by UW-Parkside and UW-Oshkosh, and to consider personal histories related to naming of a facility at UW-River Falls, as permitted by s.19.85[1][f], Wis. Stats.
The board arose from closed session at 12:50 p.m., having adopted the following resolution on a unanimous roll-call vote, with Regents Axtell, Bradley, Davis, Gottschalk, Olivieri, Pruitt, Randall, Richlen, Rosenzweig, Salas, Smith, and Walsh (12) voting in the affirmative:
UW-Madison: Approval of Salary: Dean of the School of Business
Resolution 8992: That, upon recommendation of the President of the University of Wisconsin System and the University of Wisconsin-Madison Chancellor, the annual salary for Michael Knetter, Dean of the School of Business, University of Wisconsin-Madison, be increased by $50,000 from private funds to $297,659, effective March 1, 2005.
The meeting was adjourned at 12:50 p.m.
Submitted by:
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Judith A. Temby, Secretary