January 1998
Board Meeting Minutes

Board of Trustees Meeting Minutes
Wednesday, January 21, 1998
World Trade Center
Saint Paul, Minnesota

Trustees Present: Nancy Brataas, Kathleen Caffey, Archie D. Chelseth, Dennis Dotson, Robert Erickson, Christine Fritsche, Stephen L. Maxwell, Gary Mohrenweiser, Michael Nesdahl, Denise Stephens, Michael Vekich, James Wafler

Trustees Absent: Daniel G. Coborn, David Erickson, Charles W. Williams

1. Call to Order
   Chair Vekich called the meeting to order at 2:00 p.m., and announced that a quorum was present. There were no changes to the agenda.
2. Chair's Report
   a. Approval of December 17, 1997, Board of Trustees Meeting Minutes
   Trustee Caffey moved approval of the December 17, 1997, meeting minutes. Trustee Mohrenweiser seconded, and the motion carried without dissent.

   b. Approval of Joint Committee Meeting Minutes

   • Joint Facilities and Educational Policy, September 16, 1997

   Trustee Fritsche moved approval of the September 16, 1997, joint Facilities and Educational Policy Committees meeting minutes. Trustee Caffey seconded, and the motion carried without dissent.

   • Joint Board Operations and Personnel, October 21, 1997

   Trustee Robert Erickson moved approval of the October 21, 1997, joint Board Operations and Personnel Committee meeting minutes. Trustee Stephens seconded, and the motion carried without dissent.

   c. Report of the Ad Hoc Committee on Legislative Planning, December 16, 1997 Trustee Wafler, chair of the Ad Hoc Committee on Legislative Planning, reported on the December 16, 1997, meeting. MnSCU will host a Friends of MnSCU dinner on January 22, 1998, at St. Paul Technical College.

   d. Report of Executive Committee Meeting, January 5, 1998
   Chair Vekich reported that the Executive Committee met on January 5, 1998, and reviewed the agenda for the January Board Meeting. The Board met in a retreat following the Executive Committee meeting.

   e. Other
   Chair Vekich called for a motion to suspend the rules in order to ratify the Minnesota Public Higher Education Compact Agreement. The agreement formalizes collaborations between MnSCU and the University of Minnesota and was signed by Chancellor Anderson and President Yudof on January 15, 1998.

   Trustee Chelseth moved to suspend the rules to allow the Board of Trustees to consider taking action on the Minnesota Public Higher Education Compact Agreement. Trustee Robert Erickson seconded and the motion carried without dissent.

   Trustee Chelseth moved that the Board of Trustees ratify the Minnesota Public Higher Education Compact agreement, dated January 15, 1998. Trustee Robert Erickson seconded and the motion carried without dissent.

   Chair Vekich thanked Dave Farber, Farber Sound, who has been providing the amplification and audio-recording of the Board meetings since 1996. Minnesota Satellite and Technology will take over the production beginning with the March Board meeting.
   

3. Trustee Report
   There were no Trustee reports.
4. Chancellor's Report: Morris J. Anderson
   Chancellor Anderson announced that MnSCU's bonding publication, entitled "Building Minnesota: A Blueprint for the Future," is available for distribution. A follow-up publication on the supplemental budget is forthcoming. He complimented the students and staff at St. Paul Technical College for their assistance with the publications.
   
5. Chancellor's Consent Agenda
   There were no items for the Chancellor's Consent Agenda.
   
6. Joint Council of Student Associations
   The following representatives of student associations addressed the Board of Trustees: Jason Krogerson, president, Minnesota Community College Student Association, Joe Jung, legislative liaison, Minnesota Technical College Student Association, Francis Klinkner, state chair, Minnesota State University Student Association, and Frank Viggiano, executive director, MSUSA. There was a brief discussion related to the transfer of the management of the Nellie Stone Johnson Scholarship endowment to the Minnesota State University Student Association.
7. MCCFA, IFO, and UTCE: Joint Opportunity to Address the Board
   The following representatives of faculty associations addressed the Board of Trustees: Larry Litecky, president, Minnesota Community College Faculty Association, and Bruce Hemstad, president, United Technical College Educators.
8. Board Standing Committee Reports
   a. Fiscal Policy Committee
   Committee Chair Chelseth reported that the Fiscal Policy Committee did not meet because of a lack of a quorum due to members' illnesses. The 1997 Gifts and Grants Report was the only action item on the committee's agenda.
   1. 1997 Gifts and Grants Report
      Committee Chair Chelseth reported on the 1997 Gifts and Grants Report. Corrected pages of the report were distributed. MnSCU's institutions and their foundations received nearly $50 million dollars in gifts and grants during FY1997.

      Committee Chair Chelseth moved that the Board of Trustees accept the FY1997 Gifts and Grants Report consistent with Board Policy 8.1. Trustee Robert Erickson seconded and the motion carried without dissent.

      Chair Vekich commented that the thank-you luncheon for the foundations and their institutions, hosted by the Board of Trustees and held earlier today, was a great success.

   2. MnSCU Reserves Policy (First Reading)
      Committee Chair Chelseth reported that this item will be on the agenda for final action at the March meeting.
   3. Revenue Fund FY1999 Spending Plan (First Reading)
      Committee Chair Chelseth reported that this item will be on the agenda for final action at the March meeting.
   4. Review of Delegation Principles
      Committee Chair Chelseth reported that this item will be on the agenda at the March meeting.

   b. Educational Policy Committee

   1. Customized Training Network Overview
      Committee Chair Fritsche explained that the committee heard an informational presentation on customized training networks at three campuses: Northwest Technical College, Alexandria Technical College, and Hennepin Technical College.
   2. Common Course Number Feasibility Report
      Committee Chair Fritsche reported that this item has been postponed and will be heard at a future date.
   3. Metro Plan Update
      Committee Chair Fritsche reported that the Board of Trustees will hold public hearings on the Metro Plan Report on Wednesday, February 4, at Metropolitan State University, and on Thursday, February 5, at Minneapolis Community and Technical College. Public notice and guidelines for the hearings will be distributed in the next few days.

      Committee Chair Fritsche explained that the preliminary report on the Metro Area Master Academic Plan was prepared by Dr. Reinhardt, a former state demographer, in consultation with many advisory groups. The report contains recommendations and not singular solutions. The Educational Policy Committee received the consultant's report and did not take any action on it at this time.

      Chancellor Anderson will provide the leadership on the Metro Plan for the Board of Trustees over the upcoming months, and will provide a timetable outlining the subsequent steps for the Metro Plan.
      

   c. Joint Fiscal Policy and Educational Policy Committees

   1. FY1999-FY2001 Allocation Model (Second Reading)
      Educational Policy Committee Chair Fritsche moved the recommended motion, as follows: The Board of Trustees endorses the Chancellor's outline presented above for preparation of FY2000-FY2001 operating budget principles and allocation method. The Chancellor will provide the Board with an update of the peer grouping effort in March 1998 and May 1998. The Board intends to adopt principles and a new allocation framework in advance of the FY2000-FY2001 operating budget request to Governor Carlson and the Minnesota legislature. The Chancellor is further directed to prepare the FY1999 operating budget recommendations without change to the current allocation method. Trustee Maxwell seconded and the motion carried without dissent.
      
   2. MnSCU Fee Policy (Second Reading)
      Educational Policy Committee Chair Fritsche moved the recommended motion, as follows: The Board of Trustees approves the recommended MnSCU fee policy and repeals the carry forward policies CC V.01.02, Resources: Fees Section; SU Policy 5.4-Supplement Fees; SU Policy 5.6; Student Activity and TC 3.2.2.0 Fees and MnSCU Board Policy 2.5, Application Fee. Staff is directed to include the projected impact of the fee policy change into the tuition proposal for FY1999 and propose amendments if necessary. Trustee Maxwell seconded.

      Frank Viggiano, executive director, Minnesota State University Student Association, briefly addressed the Board, and explained that after consultation with MnSCU staff, MSUSA has no objections to the policy.

      The motion carried without dissent.
      

   3. State Grant Recommendation

      Educational Policy Committee Chair Fritsche explained that the joint committees had significant discussion and received testimony relative to the State Grant Recommendation. The joint committees amended the recommended motion by a roll call vote of five in favor, four opposed.

      Educational Policy Committee Chair Fritsche moved the amended motion as follows:

      The Board of Trustees accepts and supports the following recommendations:

      1. That modification be made to the current State grant program for student financial aid that ensures that the projected savings from the Federal Pell grant change are retained in the state grant program and are provided to those students/recipients at the lowest income levels, by use of the decoupling of the Federal and State grant program.
      2. That the State of Minnesota conform with each of the Federal income tax provisions in Title II of the Taxpayer Relief Act of 1997.
      3. That the recommendation of HESO extending student eligibility for child care grants to 13 quarters or 9 semesters be adopted by the State of Minnesota.

         Trustee Wafler seconded the motion.

      Trustee Nesdahl reported that after consultation with various groups, he wished to offer a friendly amendment to part (1) above. Trustee Nesdahl's amendment follows:

      1. That modification be made to the current State grant program for student financial aid that ensures that the projected savings from the Federal Pell grant change are retained in the State grant program and are provided to those students/recipients at the lowest income levels, [strikeout]by use of the decoupling of the Federal and State grant program, [end strikeout] including the consideration of decoupling as an option.

         Trustee Fritsche and Trustee Wafler agreed to accept the friendly amendment. The amended motion, with the friendly amendment, carried without dissent.
         

   4. Tuition Conference - October 13-15, 1997
      A summary of the Tuition Conference on October 13-15, 1997, was included in the meeting materials.
   5. FY1999 Institutional Budget Principles Including Tuition Discussion
      A summary of the FY1999 institutional budget principles including tuition discussion was included in the meeting materials.
      

   d. Joint Fiscal Policy and Facilities Committees

   1. Revenue Fund Rate Restructuring Plan (Second Reading)
      Facilities Committee Chair Robert Erickson explained the resolution relative to the revenue fund rate restructuring plan was modified at the December Board meeting. The modification was excluded from the motion in the board meeting materials on page 206.

      Chair Robert Erickson moved that the Board of Trustees approve the residence hall program rate restructuring proposal effective with FY1999 rates. Universities are directed to develop a consultation process with students for review of proposed rates prior to presentation to the Board, for the Board's approval. A management plan will be presented to the Board of Trustees in November of each year and will include a four year projection of program income and expenses, a repair and replacement program and report on the past two years of experience. Each university management plan will also provide for a reserve equal to 10 percent of operating revenues by the year 2002. Trustee Stephens seconded and the motion carried without dissent.
      

   2. Metro Plan/Capital Plan
      Facilities Committee Chair Robert Erickson commented that because of the legislative session timetables, the Board of Trustees will need to take action on the Metro Plan/Capital Plan today.

      Facilities Committee Chair Robert Erickson moved to suspend the rules to take action on the Metro Plan/Capital Plan. Trustee Caffey seconded and the motion carried without dissent.

      Facilities Committee Chair Robert Erickson moved that the Board of Trustees approve the Metro Plan Capital Program as outlined above (pages 210-225 of the meeting materials) and direct the Chancellor to convey the program to the Governor and the 1998 legislature. Trustee Caffey seconded and the motion carried without dissent.
      

   3. Debt Management Guidelines (First Reading)
      Facilities Committee Chair Robert Erickson reported that the debt management guidelines will repeal the Board's prior action assigning 100 percent debt service for projects not on MnSCU's approved capital program. This will be an action item at the March meeting.
      
   4. University Center Rochester
      The joint committees heard a presentation on the planning of the expansion of the University Center Rochester by Duane Kell, Ankeny Kell Architects, P.A. The plan is built around the university's vision statement for master planning. University Center Rochester Provost Dale Bower was present. Senator Kiscaden and Representative Bishop testified on behalf of the plan.
      

   e. Facilities Committee

   1. Review of Delegation Principles (First Reading)
      Facilities Committee Chair Robert Erickson reported that the committee held a hearing in December on proposed changes to the delegation policy. A sub-committee of the Facilities Committee met and further refined the policy to allow effective oversight. The review of delegation principles will be an action item at the March Board meeting.
      
   2. Campus Master Plan Presentation
      Facilities Committee Chair Robert Erickson reported that Anoka-Ramsey Community College President Johns provided the committee with a presentation on the campus master plan of the Coon Rapids campus.
      
   3. Bemidji State University/Northwest Technical College Remodeling
      Bemidji State University President Bensen reported that he and Dr. Cross, Northwest Technical College, attended the Bemidji School Board meeting on January 20, and made a presentation, on behalf of MnSCU, of the intent to acquire the old high school property, which is contiguous to the university. The School Board's reaction was favorable.
      

   f. Audit Committee

   1. Proposed Amendments to Internal Audit Charter (Second Reading)
      Committee Chair Brataas reported that the committee first reviewed proposed amendments to the Internal Audit Charter in December. The changes were technical in nature.

      Committee Chair Brataas moved the Board of Trustees approve the amended Internal Auditing Charter as proposed. Trustee Wafler seconded and the motion carried without dissent.
      

   2. Office of Internal Auditing Report of Activities and Accomplishments
      Committee Chair Brataas reported that pages 251-253 of the board packet contain the Internal Auditing Report of Activities and Accomplishments. In addition, Chair Brataas reviewed the work plan for the period January 5, 1998 to June 30, 1998, which was distributed.

      Committee Chair Brataas introduced Beth Hammer, newly hired deputy director of information technology/auditing.

      Committee Chair Brataas reported that the committee heard of two suspected illegal acts. One at South Central College has been referred to local law enforcement officials. The other suspected illegal act occurred at Minneapolis Community and Technical College. Both colleges are to be commended for their immediate response to the allegations.

      Committee Chair Brataas reported that John Asmussen, executive director of internal auditing, will establish a code of conduct for MnSCU employees.
      

   g. Personnel Policy Committee

   1. Retirement Data
      Committee Vice Chair Dotson reported that the committee reviewed retirement data and projections that will be updated on an annual basis.
   2. Salary Survey Data
      Committee Vice Chair Dotson reported that the committee reviewed technical and community college faculty salary data.

   h. Board Operations Committee

   1. Work Plan
      Committee Chair Dotson reported that Trustee Stephens and John Ostrem, deputy to the chancellor for legislative analysis, reported on the work plan.
      
9. Requests by Individuals to Address the Board
   There were no requests to address the Board.
10. Other Business
    Chair Vekich called for a motion to go into closed session to discuss the status of the contract negotiations with IFO, MCCFA, and UTCE pursuant to Minnesota Statute §471.705, subd. 1a (1996) (Minnesota Open Meeting Law).

    Trustee Robert Erickson moved to close the public session of the meeting and convene in closed session at 3:25 p.m. Trustee Mohrenweiser seconded. The motion carried without dissent.

    Trustee Maxwell moved to adjourn the closed session of the meeting and convene in open session at 4:03 p.m. Trustee Mohrenweiser seconded and the motion carried without dissent.
    

11. Adjournment
    Trustee Robert Erickson moved adjournment of the open meeting. Trustee Maxwell seconded and the motion to adjourn carried at 4:04 p.m.

Michael Vekich, Chair
Recorded by Inge Chapin

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