M I N U T E S

THE BOARD OF REGENTS OF HIGHER EDUCATION

Montana University System

November 19-20, 1998

University Center Ballroom
The University of Montana-Missoula
Missoula, Montana

These minutes were approved by the  Board of Regents at the January 28-29, 1999 meeting held at the Montana Higher Education Complex Building, Helena, Montana

ACADEMIC/STUDENT AFFAIRS COMMITTEE
ADMINISTRATIVE/BUDGET COMMITTEE

REGENTS PRESENT: Pat Davison (Chair), Kim Cunningham, Ed Jasmin, Lynn Morrison-Hamilton, Richard Roehm, and Margie Thompson; Commissioner of Higher Education Richard Crofts
REGENTS ABSENT:    Colleen Conroy (excused)

THURSDAY, NOVEMBER 19, 1998
The Board of Regents convened for its work session at 7:40 a.m. in Montana Rooms A-D of the University Center. All Regents were present except Colleen Conroy, who was excused. The following items were discussed:

Budget for Fiscal Year 2000-2001
Rod Sundsted, Associate Commissioner for Fiscal Affairs, and Laurie Neils, Director of Accounting & Budget , reviewed the Governor's budget recommendations for the Montana University System (on file) and three budget analysis tables for Fiscal Year 2000-2001 (on file). Recommendation: Place on agenda under "Commissioner's Report" for full Board to hear presentation.

CI-75
Discussion focused on three issues: (1) Would there have to be a second vote on the six-mill levy? (2) Were both tuition and fees excluded from CI-75? (3) Should they join others in a lawsuit challenging CI-75? Recommendation: Chief Legal Counsel LeRoy Schramm will prepare a document outlining the issues discussed and options to consider. Place on agenda under "Commissioner's Report" for discussion by full Board.

Regents' Budget Analysis and Coordination of Regents' Presence at Events and Activities
Discussion: If the Board of Regents is to remain an active Board, guidelines need to be developed for expenditures. Suggestion: Continue to use the state's policy. Discussion: The Regents' travel requests need to be coordinated to avoid having all the Regents at one function and none at another. Recommendation: The Commissioner's Office will develop a calendar of upcoming events such as national conferences, campus activities, graduation ceremonies, orientation for new Regents, etc., and coordinate the Regents' participation. E-mail will be used to keep the calendar current. For example, Regents may receive requests of which the Commissioner's Office is unaware. The Regents could e-mail the information to OCHE for the calendar and decide what level of Regent participation was appropriate. Also, if anyone in the Commissioner's Office attended a function in lieu of a Regent, a meeting summary could be provided to the Regents. Board expenditures will be monitored by the Commissioner's Office. Chairman Davison will be informed of any problems.

Board Education Issues
Commissioner Richard Crofts received topic suggestions from the Regents and the campuses and prepared a list for the Regents' review (on file). Recommendation: Prioritize list so that "white papers" on each issue can be developed. Using #1 as best and #5 as least, each Regent will prioritize list and give it to Commissioner Crofts before the end of the meeting. Commissioner Crofts will prepare a final list so that work on the papers can begin.

Incentive Compensation for Commissioner and Presidents
Discussion: Goals, objectives, and strategies need to be developed. Regents Jasmin (coordinator), Morrison-Hamilton, and Roehm will meet in Helena as the planning committee to review existing documents and develop a structured set of goals. [Commissioner Crofts will send Regents a report from the Boyer Commission titled "Reinventing Undergraduate Education: A Blueprint for America's Research Universities."]

Revisit Credit Cap Policy
Recommendation: Place on agenda under "Commissioner's Report" for discussion by full Board.

Clearinghouse
Identify research needs in business, decide how the university system can coordinate what it has to offer, and relay that information to the business clearinghouse; ensure follow-through. Need to focus on what they can do better. Will hear reports from the Bozeman and Missoula research vice-presidents during the full Board meeting later that day.

Athletics
Athletic Directors Wayne Hogan from UM-Missoula and Chuck Lindemenn from MSU-Bozeman provided an overview of the western conferences and divisions and potential changes. The Regents reviewed two spreadsheets on general sources of revenue for intercollegiate athletics in the Montana University System (on file): (1) Fiscal Year 1997 - Actual; and (2) Fiscal Year 1998 - Budgeted. Commissioner Crofts said they would mail to the Regents the updated versions of FY98 - Actual and FY99 - Budgeted. Discussion: To what level do the Regents want to be involved in scrutinizing athletic expenditures in relation to other programs? Recommendation: Prepare an easily understood document the Regents can use to answer questions they receive about athletic expenditures. Laurie Neils will work with Regent Roehm.
The Board recessed at 11:00 a.m. for committee meetings.
The Board reconvened in the University Center Ballroom at 1:45 p.m. Roll call showed a quorum present.



CONSENT AGENDA
Staff Items:
ITEM 101-1000-R1198 -- Staff; The University of Montana-Missoula
ITEM 101-1500-R1198 -- Staff; Montana Tech of The University of Montana
ITEM 101-1500A-R1198 -- Staff; Montana Bureau of Mines & Geology
ITEM 101-1900-R1198 -- Staff; Helena College of Technology of The University of Montana
ITEM 101-2000-R1198 -- Staff; Montana State University-Bozeman
ITEM 101-2001-R1198 -- Retirement of Don D. Collins, Department of Biology; Montana State University-Bozeman
ITEM 101-2002-R1198 -- Retirement of Harold D. Picton, Department of Fish and Wildlife Management; Montana State University-Bozeman
ITEM 101-2400-R1198 -- Staff; Extension Service
ITEM 101-2700-R1198 -- Staff; Montana State University-Billings
ITEM 101-2800-R1198 -- Staff; Montana State University-Northern
ITEM 101-2850-R1198 -- Staff; Montana State University College of Technology-Great Falls
Capital Construction Items:
ITEM 101-1003-R1198 -- Turner Hall Wiring and Fire Sprinklers; The University of Montana-Missoula
ITEM 101-2003-R1198 -- Authorization to Perform Major Maintenance Work on Lewis Hall; Montana State University-Bozeman
ITEM 101-2702-R1198 -- Authorization to Remodel the Montana Center on Disabilities; Montana State University-Billings

Regent Jasmin moved that the Board approve all items on the Consent Agenda (Staff and Capital Construction). The motion passed unanimously.

STUDENT REPORTS
Tim Sulser, President of MAS and ASMT, reported on (1) the students' involvement in helping to pass the six-mill levy; (2) MAS's support for negotiating a change in Board of Regents' Policy 506.1 to require a binding majority vote of the students to impose mandatory student fees; and (3) MAS's support of a tuition increase not to exceed 4%.

Chairman Davison asked that the Regents receive copies of any resolutions adopted by MAS.

Barrett Kaiser, President of ASUM, reported that (1) ASUM voted unanimously in favor of a resolution to defend Native American student fee waivers should they come under attack during the legislative session; (2) ASUM passed several resolutions in favor of hate-crime legislation during the upcoming session; (3) a canned-food drive would take place during the Grizzly-Bobcat game; and (4) the students were trying to reinstate a glass recycling program in Missoula.



COMMITTEE REPORTS
Academic & Student Affairs Committee
The Academic & Student Affairs Committee met at 11:00 a.m. in the Montana Rooms of the University Center. Regents present were Margie Thompson (Chair), Pat Davison, and Richard Roehm. Chairman Davison asked Regent Thompson to present the committee's report to the full Board.
SUBMISSION AGENDA
ITEM 18-002-R1077 -- Admission Requirements: General Policies; Montana University System (REVISION of Board of Regents' Policy 301)
ITEM 60-004-R0788 -- Delivery of Instruction via Telecommunications; Montana University System (REVISION of Board of Regents' Policy 303.7)
ITEM 101-2004-R1198 -- Authorization to Establish the "Spectral Information Technologies Laboratory"; Montana State University-Bozeman
ITEM 100-1006-R0998 -- Approval of Proposal to Add an Option in Applied Geoscience to the Doctor of Philosophy Degree in Geology; The University of Montana-Missoula
Regent Thompson reviewed Items a. through d. of the Submission Agenda. ITEMS 18-002-R1077 and 60-004-R0788 were suggested revisions to current Board of Regents' policies. MSU-Bozeman Provost Joe Chapman summarized ITEM 101-2004-R1198. Regent Thompson said ITEM 100-1006-R0998 had been deferred to the Submission Agenda from the Board's September meeting.

ACTION AGENDA -- CONSENT
ITEM 100-1003-R0998 -- Approval of Proposal to Add a Revised Option in Organizational Communication, and New Options in Rhetoric and Public Discourse and Communication and Human Relationships to the Bachelor of Arts Degree in Communication Studies; The University of Montana-Missoula
ITEM 100-1004-R0998 -- Approval of Proposal to Add an Option in Teaching Ethics to the Master of Arts Degree in Philosophy; The University of Montana-Missoula
ITEM 100-1005--R0998 -- Approval of Proposal to Add a Notification of Completion of Advanced Graduate Studies to the Master of Arts Degree in Philosophy with an Option in Teaching Ethics; The University of Montana-Missoula
ITEM 100-2004-R0998 -- Authorization for the Plant Sciences Department to Rename the B.S. in Crop Science to a B.S. in Plant Science with Options in Crop Science, Plant Protection, and Plant Biology; Montana State University-Bozeman
ITEM 100-2005-R0998 -- Authorization for the Plant Sciences Department to Rename the M.S. in Agronomy to an M.S. in Plant Science; Montana State University-Bozeman
ITEM 100-2006-R0998 -- Authorization for the Plant Sciences Department to Rename the Ph.D. in Crop and Soil Science and the Ph.D. in Plant Pathology to a Ph.D. in Plant Science with Options in Plant Genetics and Plant Pathology; Montana State University-Bozeman
ITEM 100-2007-R0998 -- Authorization for Land Resources and Environmental Sciences (LRES) Department to Offer a B.S. Major in Land Rehabilitation; Montana State University-Bozeman
ITEM 100-2008-R0998 -- Authorization for Land Resources and Environmental Sciences (LRES) Department to Offer a B.S. Major in Environmental Science with Options in Soil and Water Science, and Environmental Biology; Montana State University-Bozeman
ITEM 100-2009-R0998 -- Authorization for Land Resources and Environmental Sciences (LRES) Department to Offer a B.S. Major in Land Resource Sciences with Options in Land Resources Analysis and Management, and Agroecology; Montana State University-Bozeman
ITEM 100-2010-R0998 -- Authorization for Land Resources and Environmental Sciences (LRES) Department to Rename the M.S. Program to Land Resources and Environmental Sciences; Montana State University-Bozeman
ITEM 100-2011-R0998 -- Authorization for Land Resources and Environmental Sciences (LRES) Department to Rename the Ph.D. Program to Land Resources and Environmental Sciences; Montana State University-Bozeman
ITEM 100-2703-R0998 -- Authorization to Offer a Bachelor of Science Degree in Public Relations; Montana State University-Billings

ACTION AGENDA
ITEM 30-006-R0281 -- Out-of-State Course Offerings; Montana University System (REVISION of Board of Regents' Policy 303.6)
ITEM 100-1002-R0998 -- Approval of Proposal to Offer a Bachelor of Arts Degree in Environmental Studies; The University of Montana-Missoula
ITEM 100-1501-R0998 -- Approval of Proposal to Add a Minor in Hydrogeology to the Bachelor of Science Degree in Geological Engineering; Montana Tech of The University of Montana
ITEM 100-2003-R0998 -- Authorization for the School of Art to Offer the Bachelor of Fine Arts Degree; Montana State University-Bozeman
ITEM 100-2012-R0998 -- Authorization for the Department of English to Offer a Master of Arts Degree in English; Montana State University-Bozeman
ITEM 100-2704-R0998 -- Authorization to Offer a Master of Science in Sport Management; Montana State University-Billings
ITEM 100-2851-R0998 -- Approval to Convert the Approved Certificate Program in Practical Nurse to an Associate of Applied Science Degree Program in Practical Nurse; Montana State University College of Technology-Great Falls

OTHER
Investigation of One-course-at-a-time Block Scheduling at Western Montana College of The University of Montana
Karl Ulrich, Vice Chancellor for Academic & Student Affairs at Western Montana College of The University of Montana, said Western was investigating a system of scheduling currently used at private colleges in Colorado, Iowa, Tennessee, and West Virginia. He said students in that type of system took a single course at a time, which covered 18 instructional days usually followed by a four-day break. Each course was the equivalent of four semester credits, and students took four courses within the semester. The 16-credit load allowed them to graduate within the normal four-year period. Classes were usually offered between 8:00 a.m. and 3:00 p.m. The time after 3:00 p.m. was reserved for athletics and other extracurricular activities. Dr. Ulrich said they were looking at this system because Western currently emphasized experiential types of learning, including field experiences and service-learning projects, internships and classroom observations, and student internships. This type of move would enhance what they already did well and provide additional experiential types of learning projects. Western would be the first public college to attempt this type of system. Dr. Ulrich said they would try to decide by April or May whether the system would be feasible for the Western campus.
Survey of College Fair Participants at Montana Tech-UM on Differential Tuition Proposal
Joyce Scott, Deputy Commissioner for Academic & Student Affairs, referred to a one-page summary of a brief survey of high school students visiting the Montana Tech campus. The students were asked to indicate the factors most important in making decisions about college. The students listed cost as the most important, academic programs second, and location third. The students responding were students who were contemplating attending a college or university in Montana.
Report on Credit by Examination Awards in the Montana University System, 1997-98
Report from the College Board on Advanced Placement
Dr. Scott said that Items c. and d. related to reports on credit by examination. At the time of the university system restructuring, the Regents had expressed an interest in increasing participation in credit by examination. The materials received by the Regents in their agenda mailing indicated the increase had been a little uneven but steady at the four-year institutions. This year, the Colleges of Technology (COTs) and community colleges were included, and the Board would receive future reports.


Administrative/Budget Committee
The Administrative/Budget Committee met at 11:00 a.m. in the Montana Rooms of the University Center. Regents present were Regents Jasmin (Chair), Cunningham, and Morrison-Hamilton. Chairman Davison asked Regent Jasmin to present the committee's report to the full Board.
ACTION AGENDA -- CONSENT
ITEM 83-003-R0598 -- Student Payroll FICA Exemption; Montana University System (REVISION of Board of Regents' Policy 901.8)
ITEM 101-001-R1198 -- Approval of the Montana Family Education Savings Plan (MFESP) Distribution Authorization Form; Montana University System
ITEM 101-1601-R1198 -- Authorization to Expend Student Computer Fee Allocations for FY 1999; Western Montana College of The University of Montana

ACTION AGENDA
a. ITEM 26-016-R0380 -- Employment Instruments, Professional and Administrative Employees (REVISION of Board of Regents' Policy 711.1)

Commissioner Crofts said ITEM 26-016-R0380 would revise Board of Regents' Policy 711.1 to include full reporting of any employee income not included in the staff items submitted at each Board meeting. As the policy stood, the information was submitted each year at the first regular Board of Regents' meeting after September 1. The policy revision would require the information to be submitted to the Commissioner's Office by October 1 of each year. The Commissioner would then share that information with the Regents, though not necessarily in association with a Regents' meeting.

b. ITEM 100-002-R0998 -- Competition with the Private Sector; Montana University System (NEW Board of Regents' Policy)

Regent Jasmin said ITEM 100-002-R0998 was a new Board of Regents' policy that was developed after a lot of discussion over the past year. He moved its approval.
Regent Thompson, who chaired the task force that developed the policy, asked what mechanisms were in place to get the information out to the public.

Commissioner Crofts said they would probably ask the various campuses to work with local business organizations, chambers, etc. They would also do a systemwide press release to announce the policy. He said the key to the policy's success was that businesses would know they had an opportunity to review any unfair competition concerns with university officials.

Regent Jasmin pointed out that the policy stated: "It is the responsibility of each president and chancellor of the university system to review carefully activities that are marketed, appear to be focused on the generation of income, and that compete with the private sector. Because of the possibility of new businesses coming into the marketplace, this review will be conducted annually." Regent Jasmin said he viewed the policy as proactive.

In response to a question from Chairman Davison, Commissioner Crofts said the policy would not apply to MHESAC (Montana Higher Education Student Assistance Corporation). He said MHESAC was operated by a separate board that happened to have some overlap in membership, but it was not a campus or component of the university system.

c. ITEM 101-101-R1198 -- Budget Amendment for Carl Perkins Federal Program; Office of Commissioner of Higher Education
Regent Jasmin said ITEM 101-101-R1198 was a budget amendment for the Carl Perkins federal program and approved authorization to spend $424,000 of federal money on Perkins' loans.

d. ITEM 101-1503-R1198 -- Authorization to Accept the Donation of the Kathy Lillis Chapel to be Built on the Campus; Montana Tech of The University of Montana
Regent Jasmin said ITEM 101-1503-R1198 authorized Montana Tech-UM to accept the donation of the Kathy Lillis Chapel from Montana Tech alumnus Bert Lillis in memory of his daughter.

Montana Tech Chancellor Frank Gilmore distributed a booklet that included photos and site plans for the chapel (on file). He said the chapel would be funded entirely by Mr. Lillis.

In response to a question from Chairman Davison, Chancellor Gilmore said the project had gone through the usual approval process on campus. He noted that the late Montana Tech President Fred DeMoney had made the decision in the 1980s to accept the chapel for the Tech campus.

e. ITEM 101-1602-R1198 -- Land Acquisition, Series D 1996 Facilities Improvement and Refunding Revenue Bonds; Western Montana College of The University of Montana
Western Montana College Chancellor Sheila Stearns said ITEM 101-1602-R1198 was a certificate of completion to show that the project in the Series D 1996 bond indenture had been completed.

f. ITEM 101-1604-R1198 -- Authorization for a Campus Radio Station; Western Montana College of The University of Montana
Regent Jasmin said ITEM 101-1604-R1198 was an addition to the agenda that would authorize Western to impose a $20.00 fee per student, per semester for the purpose of funding a campus radio station. He said the students at Western had approved the fee.
Following discussion, Commissioner Crofts said it was important they focus on the action they were taking at that time, which was to approve the $20.00 per-semester, per-student fee requested in ITEM 101-1604-R1198.



OLD BUSINESS
a. Regents' Information Technology Committee Status Report
David Todd, Director of Information Services at MSU-Bozeman, and John Cleaveland, Director of Information Technology at UM-Missoula, provided the Regents with updates on the status of the Banner system implementation on the UM and MSU campuses.
Following a brief question-and-answer period, Chairman Davison thanked them for the updates.
ITEM 101-1502-R1198 -- Authorization for Exception from Board of Regents' Policy 901.9, Campus-Affiliated Foundations; Montana Tech of The University of Montana
ITEM 101-1603-R1198 -- Authorization for Exception from Board of Regents' Policy 901.9, Campus-Affiliated Foundations; Western Montana College of The University of Montana
ITEM 101-2701-R1198 -- Authorization for Exception from Board of Regents' Policy 901.9, Campus-Affiliated Foundations; Montana State University-Billings
Commissioner Crofts said Board of Regents' Policy 901.9 on campus-affiliated foundations approved in September included a significant change in that university employees would no longer be members of foundation boards. The policy allowed for a transition period to meet that requirement, and three foundations with university system employees on their boards were requesting the transition period. At the end of that time, all three units would be in full compliance with the policy.

MSU Billings Chancellor Ron Sexton said the Billings' foundation board had asked him to express its appreciation to the Regents for the extension and transition period. Also, the board's bylaws were being amended to make a provision for continued faculty membership in non-voting status on the board. As a result, the faculty would continue to have a role and would have open access and dialogue with the foundation but in a non-voting capacity.
COMMISSIONER'S REPORT
CI-75
Chief Legal Counsel LeRoy Schramm reviewed a handout titled "CI-75: Regents' Options" (on file). Issue #1 questioned whether fees approved by the Regents were exempt from the election requirement in the same fashion that tuition was exempt, and from whom an opinion should be requested. Option A would request a written opinion from Chief Counsel Schramm as the Board's legal counsel; Option B would request an opinion from the Attorney General.

Issue #2 focused on whether the six-mill levy had to be subjected to a second vote by the people before it could be imposed. Using Option A, the Regents could initiate suit to try to resolve the narrow question regarding a second six-mill levy election. Using Option B, the Regents could join suit as one of a larger number of plaintiffs challenging the basic constitutional validity of CI-75. The question of a second election for the levy would likely be one "count" among many in such a suit.

Chief Legal Counsel Schramm noted also that all options reviewed presupposed the Regents would concurrently seek legislative approval of the authorized six-mill levy. Also, none of the options foreclosed the Regents from exploring the possibility of legislation to provide for an election that might extend the six mills for a period beyond 10 years and that would more clearly provide that revenue increases due to the appreciation in value of property were included.

In response to a question from Regent Roehm, Chief Counsel Schramm said they would likely file a declaratory judgment action. They would still have to bring suit and name an adverse party. The adverse party would be the State of Montana, and they would have to serve the Attorney General. Once the complaint was filed, they could make a motion for summary judgment. However, they still had to file some type of suit, a declaratory judgment or a regular complaint.

Regent Roehm said they should avoid as much as possible appearing to the public as a public institution using public funds to sue another public institution that would defend itself with public funds.

Regent Jasmin noted the action was neither unfriendly nor adversarial; it was just a matter of determining the interpretation of a law.

In response to a question from Regent Roehm, Chief Counsel Schramm said he did not believe they would have to hire outside counsel.

Chairman Davison expressed some hesitation in hastening to make a decision without the legislature having the opportunity to deal with the issue. However, given it would not likely be a large expenditure, and given that it seemed reasonable they had a fair question to ask the court, he thought it in the best interests of the longevity of the university system that they go ahead with the suit.

Regent Jasmin felt the legislature would appreciate that type of clarification.
Commissioner Crofts said the remedy they would seek through the suit would be a remedy the legislature could not give them. The legislature could approve it again, levy the tax, and make it subject to a vote of the people. They could pass it with a three-fourths vote and put it in place for the two years of the biennium. However, he did not think the legislature could pass a statute saying they did not need to take the levy to a second vote of the people. That remedy was only available to them through the court.

Chairman Davison asked Chief Counsel Schramm to go ahead and initiate the action.
The Board recessed at 3:30 p.m. for a meeting with faculty representatives in the Montana Rooms of the University Center.

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FRIDAY, NOVEMBER 20, 1998
The Board reconvened at 9:00 a.m. in the University Center Ballroom. A quorum was present.
Forum for Public Comment
Chairman Davison said this time period was set aside for the Board to hear public comment on university system issues. He asked that speakers use the podium and identify themselves. He also asked that remarks be kept to a reasonable length.
The following individuals spoke on behalf of the Missoula campus' classified staff, noting it was time for them to receive decent pay increases: (1) Gordy Pace, president of the Staff Senate at UM-Missoula; (2) Sue Malek, president of the classified staff union at UM-Missoula; (3) Kath McChesney-Lape, an employee in the Department of History at UM-Missoula and member of the MPEA union; (4) Cheryl Bramsen, vice president of the MPEA classified staff at UM-Missoula; (5) Karen Kaley, an employee in the Honors College at UM-Missoula; and (6)Jill Burke, an employee of UM-Missoula.

Also speaking to the Board was Michael Mayer, president of the University Teachers Union (UTU) at UM-Missoula, who discussed the relationship between the UTU and the Regents.

NOTE: Speakers' remarks are on tape at the Commissioner's Office in Helena.
Chairman Davison noted that both Gordy Pace and Sue Malek had been in contact with him and had represented the classified staff very well. Also, UM President George Dennison had championed their case before the Regents and legislature. Chairman Davison said they had a definite commitment from the Regents to make a very serious effort in dealing with the classified staff salary levels. He said they would not walk away after the meeting and not deal with the issue. He also asked that Gordy Pace discuss with him after the meeting Mr. Pace's recommendation for a regular time on the Regents' agenda to meet with classified staff representatives.
Chairman Davison noted that although he could not give them a commitment at that time about pay raises, he would give them his personal commitment that he would work with the Governor and legislative leadership toward that end. If it appeared they were not making headway, he would bring before the Board a proposal to consider a change in strategy.

Commissioner Crofts noted that when the Board was concluding its work on budget priorities to present to the Governor and legislature, the Board acted on its own initiative to make a special plea on behalf of the statewide pay plan. Since that time, Commissioner Crofts and the university presidents had communicated once again to the Governor on this subject and had found a variety of ways to bring as much attention as they could to the disparity in classified staff salaries. Also, the Board had endorsed a recommendation from the presidents and Commissioner Crofts that they commit to pursuing equitable salaries for all university system employee groups.
Following a five-minute break, the Board reconvened at 9:55 a.m.

OLD BUSINESS (continued)
Update of Research Activities in the Montana University System
Chairman Davison said recent discussions among the Regents and business and community leaders had focused on what could be improved between business and research activities in the state. The university presidents had suggested a good place to start would be an update of what actually was occurring at that time with technology transfer and research activities and their development on the campuses. Chairman Davison introduced Tom McCoy and Lloyd Chesnut, research vice presidents at MSU-Bozeman and UM-Missoula, respectively.

NOTE: Remarks from Tom McCoy and Lloyd Chesnut are on tape at the Commissioner's Office in Helena.

Following a question-and-answer period, Vice Chairman Ed Jasmin (sitting in temporarily for Chairman Davison) thanked them for their presentations.

COMMISSIONER'S REPORT (continued)
a. Budget Analysis and Tuition Proposal
Commissioner Crofts referred to the Governor's budget recommendation for the university system (on file) and three budget analysis tables (on file) put together by the Commissioner's Office to depict the budget situation. Commissioner Crofts reviewed Tables 2 (Montana University System FY2000-2001 Budget Analysis) and 3 (Montana University System 2001 Biennium Budget Analysis). Associate Commissioner for Fiscal Affairs Rod reviewed Table 4 (Educational Units 2001 Biennium Budget Analysis).

Chairman Davison noted the Regents had gone through the information fairly thoroughly the previous day at their work session. He said it was appropriate for them to recognize there were a lot of estimates and some costs that were not yet explicitly stated but would still be part of the equation. Chairman Davison said the information was very helpful to the Regents and thanked Rod Sundsted and Laurie Neils for preparing it.

Commissioner Crofts said that for the past two legislative sessions they discussed setting tuition in advance of the legislative session and had carried to the legislature a university system tuition proposal for the succeeding biennium. During the previous biennium, they did that with fees for two years at UM and one year at MSU. They were proposing to do that again for the upcoming session but for both years of the biennium with respect to both tuition and fees. Tuition proposals had been presented to the Regents and discussed during the November and/or January meetings, and the Regents made a tentative decision on tuition and fees for the next biennium. Commissioner Crofts said the Regents had been careful to conclude that the final decision on setting tuition and fees would come at the Board's regular May meeting following conclusion of the legislative session. During the past two legislative sessions, they had told legislators what their tuition increases would be and, despite the fact that the system's budget had been reduced below what the Governor recommended, they had held to their original tuition increases.

Commissioner Crofts said it had become clear over the past year that the Regents were committed to a lower rate of tuition increases than those put in place over the past several years, and they wanted to hold tuition increases in the next biennium to something closer to current cost-of-living increases, somewhere between 2.5% and 3%. He said they needed to carefully review the budget analysis because a $30 million increase sounded like a lot of money until a careful look was taken at the system's obligations and various present law adjustments. Those categories were not funded totally by what was recommended in the Governor's budget, so right away they had to make up some deficit. Commissioner Crofts said they had reviewed the issue carefully, and it was his recommendation to the Board that it give tentative approval to an overall systemwide 4% tuition increase for the upcoming biennium. He said that was probably higher than they hoped, but the analysis they had gone through suggested if they did not go that high they would have budgets that would significantly diminish the quality of what they provided to students. Regarding the fees, Commissioner Crofts said they did not have the details of all the fees at that time, but the guidelines and directions given to the campuses were that fee increases in total be consistent with a similar amount in the vicinity of 3.5 to 4%.

Regent Jasmin moved that the Board have as its intention to tentatively approve for the upcoming biennium an overall tuition increase of no more than 4%, with the final decision to be made at the Board's May 1999 meeting.

Lengthy discussion followed on the potential of differential tuition necessitating additional tuition increases on top of the 4%; noting that the 4% increase was the Regents' "line in the sand"; a request from UM President Dennison that the Regents consider a 4% or a 6% tuition model for The University of Montana (handouts on file); an explanation from Associate Commissioner for Fiscal Affairs Rod Sundsted on the differences in the numbers he had discussed and the numbers presented in the handouts from President Dennison; and quality and access issues.

Regent Cunningham said the students looked at these issues in their MAS meeting. For the record, she said she would like to note that they were in support of trying to hold tuition increases to no more than 4%. She said that was an important student concern.
Chairman Davison said it was important to know that the motion before them, while tentative, presented what they were carrying out to the rest of the world at that point, and it would be fairly difficult and take something dramatic to change their recommendation.

Commissioner Crofts agreed that operating budgets during the upcoming two years were going to be tight. However, they had gone through several years of higher-than-average tuition increases and had reached a point where they needed to pull back. The students were telling them they needed to do that, and information about student debtload was telling them. The budgets for the next two years would be extraordinarily tough, despite the fact they may receive as much as $30 million in new money. However, tuition increases had ranged from 6.5% to 7% during the past four years, and he believed they needed to pull back.

Chairman Davison said they also needed to realize they could not run quality programs without money, and if the budgets became so tight they could not do that, that needed to be stated. He said while no one wanted higher tuition increases, quality programs had to be funded, and one of the funding sources was tuition.

NEW BUSINESS
UM President Dennison introduced Missoula faculty member Annie Sondag, who had recently been recognized as the CASE Professor of the Year.
Professor Sondag said the award was given for excellence in teaching, and she wanted to thank everyone on the Missoula campus. She said winning the award made her realize how many hard-working and wonderful people there were on the campus who did not receive the recognition they deserved.

Regent Roehm said President Dennison had also been recognized by CASE.
Chairman Davison congratulated President Dennison on behalf of the Board for the CASE award he received for his leadership.

Appeals
Chairman Davison said the Regents had received the appeal materials in their agenda mailing, and they would be voting on two appeals: one from Butte (Denise Solko) and one from Great Falls (Scott Dion). He said they could either entertain the appeal and hold a hearing on it at the January meeting, or they could deny the appeal and thereby uphold the Commissioner's decision.
Chairman Davison said they would first address the appeal from Butte. He reminded the Regents they would not be discussing the merits of the case in detail at that time.

Chairman Davison said they would address the appeal from Great Falls.


The Board recessed for lunch at 11:45 a.m.
The Board reconvened at 12:30 p.m. in the University Center Ballroom.

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COMMISSIONER'S REPORT (continued)
a. Differential Tuition Proposal
Commissioner Crofts referred the Regents to his November 18, 1998 memo that addressed differential tuition (on file). He said that since they discussed the issue in September his staff had developed four different options for consideration, which were outlined in the memo (spreadsheets on Options 1 through 4 on file). Option 1 would freeze tuition at the Colleges of Technology (COTs) and the smaller four-year campuses and increase tuition at Missoula and Bozeman; Option 2 would freeze tuition at the COTs and increase tuition at the other six campuses; Option 3 would lower tuition at the COTs, freeze tuition at the smaller four-year campuses, and increase tuition at Missoula and Bozeman; and Option 4 would lower tuition at the COTs and increase tuition at the other six campuses. Doing nothing was also an option. Commissioner Crofts said all the options were based on a 4% overall revenue increase from resident enrollments.

Commissioner Crofts said a question had been raised at the September meeting as to what they were trying to achieve with the differential tuition proposal. He referred to page 2 of his memo, noting that the proposal would add pricing as another mechanism to encourage students to consider two-year campuses; remedy the high-tuition situation at the COTs; and also add pricing as another mechanism available to them in their enrollment management efforts.

Commissioner Crofts reviewed two-year and four-year tuition and enrollment comparisons based on WICHE data (on file). The comparisons were made among western states similar to Montana.

Among the issues discussed were the following:

The following correspondence and/or resolutions addressing the differential tuition proposal are on file in the Commissioner's Office:
November 18, 1998 memo from MSU-Bozeman University Governance Council
Resolution from ASMSU-Bozeman
Resolution from ASMSU-Billings
November 6, 1998 memorandum from the Associated Students at the MSU College of Technology-Great Falls
October 20, 1998 memorandum and resolution from ASWMC in Dillon

b. Legislative Agenda
Commissioner Crofts referred to his November 13, 1998 memo to the Regents regarding their legislative agenda (on file). He said a draft of the agenda discussed at the Regents' September meeting had been revised and expanded, and he was asking for the Board's endorsement. Commissioner Crofts said he would keep the Regents updated on the status of the items once the legislative session began.

c. Western Governors University (WGU)
Commissioner Crofts said his November 18, 1998 memo (on file) summarized recent developments with the Western Governors University and the university system's involvement with WGU. First, they were recommending the two universities gather proposals for courses and programs to be offered through the WGU. Because the WGU offerings would be existing courses and programs, Commissioner Crofts proposed handling those through the Level I academic approval process. Second, they needed to implement their commitment to establish at least one local center in Montana. They would be developing an RFP process that would invite the campuses to serve as local centers. Joyce Scott, Deputy Commissioner for Academic & Student Affairs, would coordinate that process. Erik Burke in the Governor's Office would work with Deputy Commissioner Scott to solicit interest among the state agencies in becoming local centers. Commissioner Crofts said they would be submitting their state plan for local centers to the WGU.


d. Board Resolution
Commissioner Crofts asked that the Board approve the following resolution to express its thanks for the efforts of the six-mill levy committee:

WHEREAS, the recent six-mill levy vote displayed widespread public support for higher education, and

WHEREAS, the overwhelming support for the six-mill levy was the result of a widespread effort to educate the public, and

WHEREAS, at the center of this singularly effective campaign was the Committee to Keep the Six-Mill Levy;

Now therefore be it RESOLVED that

The Board of Regents of Higher Education, on behalf of the entire Montana University System, offers its sincere thanks and gratitude to Bob Brown, Jean Hagen, Alan Nicholson, and all the other members of the Committee to Keep the Six-Mill Levy who gave so generously of themselves to make the past election so beneficial to the cause of Montana higher education.

Adopted unanimously at a regularly scheduled meeting in Missoula, Montana, on November 20, 1998.

e. Credit Caps
Speaking before the Board were students Tim Sulser, representing MAS and ASMT; Barrett Kaiser, president of ASUM; Matt McKamey, president of ASMSU-Bozeman; Brad Faulhaber, president of ASWMC; Diego Hammett, president of ASMSU-Northern; Chuck Hunter from MSU-Billings; Danyel Sheen from the Helena COT; and Dawn Begnaud from the Great Falls COT.

Discussed focused on the following:

The following correspondence and/or resolutions addressing the credit cap issue are on file in the Commissioner's Office:

Chairman Davison asked that the Regents receive hard copies of the numbers presented by Matt McKamey, Brad Faulhaber, and Diego Hammett.

Chairman Davison said there was definitely an interest in pursuing the matter and examining what the facts were telling them, what the policy's initial objective was, and whether that was being achieved. He suggested the issue be placed on the January 1999 agenda for further discussion and asked that in the interim all parties gather sufficient information to decide whether the policy was achieving its objective.
Commissioner Crofts said they would be also be discussing the credit cap appeals at the December 8th Policy Committee meeting. At first glance, it did seem that something additional needed to be done to ensure consistency across the campuses with regard to the circumstances under which appeals were either granted or denied.

CAMPUS REPORTS
a. The University of Montana-Missoula
President Dennison distributed the "President's 1998 Report: Partners in Building a Better Community." He also reported that the Helena College of Technology had gone through its interim visit by the accrediting association and everything had gone fine. The visit also dealt with the COT's associate of arts degree program, which was in good shape. Helena COT Dean Alex Capdeville had arranged a collaborative relationship with a company in Ronan and would be doing training programs for that company.

b. Western Montana College of The University of Montana
Chancellor Stearns reported that Western's volleyball team, which were the Frontier Conference champions, were beginning a match at the regional competitions and everyone wished them luck.

c. Montana State University-Northern
Chancellor Rao said three students from MSU-Northern had represented Russia in the Model United Nations the previous month, and he wanted to express his thanks to History Professor Steve Sylvester for his leadership.
Chancellor Rao also reported that:

MSU-Northern had an Internet business incubation center that had been partnered with the Havre Bearpaw Development Corporation, and he wanted to acknowledge Computer Science Associate Professor Roger Stone for his leadership. The center helped get businesses not using the Internet to use it as a major mode of communicating and disseminating information.

MSU-Northern Associate Professor James Howland had successfully brought several Microsoft instructional lab grants to the university, and Chancellor Rao wanted to thank him for that.

The Accreditation Board for Engineering and Technology (ABET) had fully accredited the baccalaureate program in civil engineering technology at MSU-Northern and an associate degree in electronics engineering technology.

MSU-Northern was continuing to explore partnerships with Sunbelt Communications, a company that had built television stations in a large number of smaller communities. They were trying to build an agreement that would ensure fair market value for any lease or rent in the event the television station profited significantly during the term of a long-term lease. They were also doing a needs assessment for the area to demonstrate there was a need and that viewership would actually increase along the Hi-Line with a television station there. Chancellor Rao thanked Regent Morrison-Hamilton for joining them on their visits to college campuses that have Sunbelt television stations.

In regard to the budget at MSU-Northern and recent newspaper articles, Chancellor Rao said permanent reductions would be necessary in the current and subsequent years to reduce Northern's deficit accounts, and measures were underway to achieve that objective.

d. Montana State University-Billings
Chancellor Ronald Sexton said they had successfully completed the Northwest accreditation visit. They had a draft report that looked pretty good and did not include any unusual surprises. He expressed his appreciation to the Board members and Commissioner's Office staff who participated in that process. They would go before the commission at the annual meeting in December and should have a final report at that time, which he would bring back to the Regents in summary form for consideration.

e. Montana State University-Bozeman
President Malone introduced Tom Stump from the Great Falls COT, who was acting as interim Vice President for Administration & Finance with former vice president Rob Specter's departure to a position at Oregon State University.
Chairman Davison thanked President Dennison and his staff for hosting the Regents' meeting and related activities.

The Regents recessed at 1:30 p.m. to continue their work session from the previous day. Discussion focused on higher education tax issues. Making presentations at the session were Timothy Stiles, Director, West Region, Exempt Organizations Tax Practice, KPMG Peat Marwick LLP, San Francisco; and Marianna Dyson, Weil, Gotshal & Manges LLP, Washington, D.C.

With no further business to come before the Board, the meeting adjourned at 4:30 p.m.

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