October 2004

Board Meeting Minutes

Wednesday, October 20, 2004
Wells Fargo Place
St. Paul, Minnesota

Trustees Present: Robert Hoffman, Chair, Duane Benson, Mary Choate, Tyler Despins, Cheryl Dickson, Ivan Dusek, Clarence Hightower, Vincent Ijioma, Lew Moran, David Olson, David Paskach, Thomas Renier and Christopher Schultz

Trustees Absent: Will Antell and Ann Curme Shaw

Call to Order
Chair Robert Hoffman called the meeting to order at 1:06 p.m.

Chair's Report
1. Minutes of Board of Trustees Meeting - Major Topic Discussion of Wednesday, September 22, 2004
  As there were no corrections to the minutes, Chair Hoffman announced the minutes stand approved as written.
2. Minutes of Board of Trustees Meeting of September 22, 2004
  As there were no corrections to the minutes, Chair Hoffman announced the minutes stand approved as written.
3. Draft Minutes of Executive Committee Meeting of October 6, 2004
  As there were no corrections to the minutes, Chair Hoffman announced the minutes stand approved as written.
4. Recognition of Trustee Mary Choate's Service to the Association of Community College Trustees (ACCT) Board
  Chair Hoffman recognized Trustee Mary Choate for her service to the Association of Community College Trustees (ACCT) Board. Trustee Choate was appointed to the ACCT Board of Directors in March of 2003 and served through August of 2004. She also served as a member of the ACCT Public Policy Committee helping to set the organization's national higher education agenda.
Trustee Reports
Association of Community College Trustees (ACCT) Leadership Congress
Trustee Ivan Dusek reported that he attended the ACCT Leadership Congress in New Orleans on October 4-9, 2004 . He distributed a report, "An Assessment of Minnesota State Colleges and Universities to Underrepresented Students," to the ACCT Diversity Committee as well as a press release and description of Minnesota State Colleges and Universities grants available to underrepresented students.
He complimented Chair Hoffman, Chancellor McCormick and Vice Chancellor Bill Tschida who presented a panel on Chancellor Evaluations and another presentation given by Chair Hoffman, Trustee Cheryl Dickson and Internal Auditor John Asmussen on Internal Auditing.

Chair Hoffman added that Trustee Dusek also presented on the panel for Chancellor Evaluations and was in the audience for the presentation on Internal Auditing.

Chair Hoffman reported that he and Chancellor McCormick attended the Minnesota Department of Education Teaching Commission roundtable and luncheon in Saint Paul on October 13. He stated that there is a tremendous focus on improving the performance of the K-12 classroom and a call to action on teacher quality.

Chair Hoffman summarized the results of a discussion on meeting protocol that occurred at the October 6, Executive Committee meeting. He stated that the use of "Honorable" in addressing Trustees is not normal protocol. An option in committee meetings is to use "informal consideration." The committee chair shall set the tone and a more formal procedure shall be followed at the Board of Trustees meetings.
Chancellor's Comments
Chancellor McCormick thanked Chair Hoffman and the Board members for their time, commitment and dedication to the system. He welcomed the constituency leaders, presidents and Office of the Chancellor staff. He complimented and thanked Presidents Pat Johns and Joe Sertich for the profile report of Anoka-Ramsey Community College and the Rainy River Community College Mission Approval, respectively.

Chancellor stated that he will give a report on the progress of the Work Plan goals at the January meeting. He thanked the Board members, presidents, students and staff who participated at the Biennial Operating Budget Request Hearings at Minnesota State University , Mankato , on September 30, and North Hennepin Community College on October 14. He commented that there were several important issues raised, and he emphasized the need to keep the quality of education high and tuition as affordable as possible given the financial situation facing the System. Recent budget cuts have made it more difficult to meet the expectations of the citizens of Minnesota and especially those of the students.
Chancellor reported that the proposal before the Board is based on a partnership between the taxpayers and the students. The proposal involves the participation of all parties; state tax dollars to address state needs and enrollment growth; and student support for continuing quality. He remarked on a study released by the College Board that reports the average tuition for in-state students at four-year public institutions rose 10.5 percent this year, compared with a 13 percent rise last year. The average cost of tuition and fees at public institutions is now $5,132. He added that is a challenge across the country.

Chancellor stated that the scholarship gift announcement presented by The Schwan Food Company to Southwest Minnesota State University at the meeting of the Advancement Committee on October 19, underscores the importance of partners in business, communities and private investment. He expressed his gratitude adding that the gift will assist Southwest Minnesota State University in addressing access and opportunity, one of the identified strategic directions. He noted that the commitment of Mr. Lenny Pippin, President and Chief Executive Officer of The Schwan Food Company, is a vote of confidence for what the Minnesota State Colleges and Universities System is working to accomplish while contributing to the economic vitality of the State.

Chancellor thanked Senior Vice Chancellor Linda Baer and her staff for their work with the Citizens League. The Citizens League Higher Education Study Committee submitted its report to the Citizens League Board of Directors, and the Board will release the report in the near future. He added that he will comment on the recommendations from the report that will have an impact the System.

Chancellor reported that it was a privilege to be part of the panel presentations at the Association of Community College Trustees Leadership Congress. He also reported that he and Chair Hoffman participated in the Minnesota Chamber of Commerce Annual meeting in Minneapolis on September 28.

Chancellor reported that he and Chair Hoffman attended The Teaching Commission presentation by Governor Pawlenty to the business community. He added that the presentation was well received and noted that Senior Vice Chancellor Baer will work with the presidents, chief academic officers and the Minnesota P-16 Education Partnership to address issues that have emerged. He also remarked that the Government Relations team continues to organize and join him on visits with key legislators throughout the State.

Chancellor reported that he attended the naming of an athletic field at Northland Community and Technical College in Thief River Falls in honor of Mr. Lowell T. Swenson, who was inducted into the college's new athletic hall of fame.

Chancellor stated that in conjunction with the recent retreat of the Leadership Council, council members attended an evening conversation on "Capitalizing on the Potential of Minnesota's Rural Campuses" with the Center for Rural Policy and Development. He added that the discussion emphasized the need to support the colleges and universities as they explore new and expanding roles in economic development and in becoming more entrepreneurial.

Chancellor concluded his report by announcing that President Kenneth Peeders of Minnesota State Community and Technical College plans to retire at the end of the academic year. He commended President Peeders, commenting that he has been a leader among the university and college presidents. President Peeders served as a co-chair of the Leadership Council in the past year and assisted with the restructuring of the Northwestern Minnesota colleges to form Minnesota State Community and Technical College.
Joint Council of Student Associations
1. Minnesota State College Student Association
  Mr. Justin Pahl, President, Minnesota State College Student Association (MSCSA), addressed the Board of Trustees.
2. Minnesota State University Student Association
  Mr. Brad Krasaway, State Chair, Minnesota State University Student Association (MSUSA), addressed the Board of Trustees.

Minnesota State Colleges and Universities' Bargaining Units

American Federation of State, County and Municipal Employees
Ms. Karen Foreman, President, Local 638, American Federation of State, County and Municipal Employees (AFSCME), addressed the Board of Trustees.

Minnesota State University Association of Administrative and Service Faculty
Mr. John Ferden, President, Minnesota State University Association of Administrative and Service Faculty (MSUAASF), addressed the Board of Trustees.

Inter Faculty Organization
Dr. Nancy Johnson Black, President, Inter Faculty Organization (IFO), addressed the Board of Trustees.

Consent Agenda
All matters listed under Consent Agenda will be enacted by one motion in the form listed below. Any trustee may request that an item or items be removed from the Consent Agenda for independent consideration.

Mission Approval: Rainy River Community College
Itasca Community College Housing Proposal

Board Standing Committee Reports

Advancement Committee, Cheryl Dickson, Chair

Advancement Update
Committee Chair Cheryl Dickson reported that the committee heard updates from Deputy to the Chancellor John Ostrem, Associate Vice Chancellor Linda Kohl and Executive Director Catherine McGlinch on the work of the Government Relations division, the Public Affairs division, and the Minnesota State Colleges and Universities Foundation.
Scholarship Gift Announcement to Southwest Minnesota State University
Committee Chair Dickson reported that Mr. Lenny Pippin, President and Chief Executive Officer of The Schwan Food Company announced a scholarship program designed to provide Minneapolis and Saint Paul public schools' students the necessary financial resources and opportunity to attend Southwest Minnesota State University. The Schwan Food Company will provide a minimum of $800,000 over the next four years in support of the Access and Opportunity Scholarship.
Integrated Strategic Marketing and Communication Plan
Committee Chair Dickson reported that the committee heard an update and received a revised draft of the Integrated Strategic Marketing and Communication Plan from Associate Vice Chancellor Manuel López. The new draft includes revisions and suggestions made by the Board at the September meeting.

Audit Committee, Ann Curme Shaw, Chair

System-Level Accountability Framework: Student Retention Data
Committee member Duane Benson reported that the committee heard a report on the System-Level Accountability Framework: Student Retention Data. The report measures the data for student retention and for traditionally underrepresented populations.

Educational Policy Committee , David Paskach, Chair

Academic and Student Affairs Update
Committee Chair David Paskach reported that the committee heard an update from Senior Vice Chancellor Linda Baer on the activities of the Academic and Student Affairs Division.
Citizens League Higher Education Study Group Update
Committee Chair Paskach reported that the committee heard a report from Senior Vice Chancellor Baer on the Citizens League Higher Education Study Group. He stated that the Citizens League will release a formal report on the study of post-secondary education in the State of Minnesota at the end of October. He added that the results of the report shall be an item for discussion at the November retreat.
Entrepreneurial Colleges and Universities
Committee Chair Paskach reported that the committee heard a presentation from Senior Vice Chancellor Baer on the entrepreneurial colleges and universities. The presentation provided examples of centers of excellence in other states and information on how the System may develop programs in an entrepreneurial environment with the opportunity for centers of excellence, quality and collaboration.
Campus Profile: Anoka-Ramsey Community College
Committee Chair Paskach reported that the committee heard a presentation on the campus profile of Anoka-Ramsey Community College from President Pat Johns. The profile provided information highlighting the institution's unique role as well as its contribution to the system, and the institution's planning efforts.

Finance/Facilities Policy Committee, Clarence Hightower, Chair

Finance Facilities Division Update
Committee Chair Clarence Hightower reported that the committee heard an update from Vice Chancellor Laura King on the Finance/Facilities Division.
*FY 2006-2007 Biennial Operating Budget Request
Committee Chair Hightower moved that the Board of Trustees is committed to providing high-quality, accessible education at all Minnesota State Colleges and Universities. The Board strongly urges the State of Minnesota to support the Minnesota State Colleges and Universities FY 2006-2007 biennial operating budget request as illustrated in Table 1.

($ in millions)	FY2006-FY2007 Biennium
Adjusted Base*	$1,236.8
Request	$ 66.5
Total FY2006-FY2007 State Appropriation	$1,303.3

($ in millions)
Tuition Assumption (4% annual increase)	$62.9

The Board of Trustees approves the final FY 2006-2007 Minnesota State Colleges< and Universities biennial operating budget request for transmittal to the Department of Finance. The Chancellor is requested to provide periodic updates on the progress of the budget through the executive and legislative branch review and approval process.

Trustee Lew Moran stated that the Board should support the students, thereby contributing to the economic and social health of the State of Minnesota . He added that he will not support the motion and recommended that the Board members not support the motion as well.

Trustee Tyler Despins moved to amend the motion as follows: The Board of Trustees is committed to providing high-quality, accessible education at all Minnesota State Colleges and Universities. The Board strongly urges the State of Minnesota to support the Minnesota State Colleges and Universities FY 2006-2007 biennial operating budget request as illustrated in Table 1a.

The Board of Trustees approves the final FY 2006-2007 Minnesota State Colleges and Universities biennial operating budget request for transmittal to the Department of Finance. The Chancellor is requested to provide periodic updates on the progress of the budget through the executive and legislative branch review and approval process. Trustee Vincent Ijioma seconded.

Table 1a - Adjusted for no tuition increase

Minnesota State Colleges and Universities
FY2006-FY2007
Biennial Operating Budget
State Appropriation Request and Tuition Assumption

$ in millions	FY2006-FY2007 Biennium
Adjusted Base*	$1,236.8
Request	129.4
Total FY2006-FY2007 State Appropriation	$1,366.20

$ in millions
Tuition Assumption (0% annual increase)	0

* The adjusted base includes the $130.8 million enrollment adjustment for past enrollment growth, comprised of $36 million in base money and $58.8 million in one-time funds.

Trustee Despins stated his concern and wished to address issues following prior discussion at the committee meeting. He stated the System is on the side of the students, acknowledging that an investment in higher education is needed. He emphasized that at a majority of the institutions, students carry over 50 percent of their institution's budget. He added that the students are in agreement that tuition will need to increase if the budget request is not fully funded. He reflected on two recent statements by Chancellor McCormick. "We must renew the public's recognition that higher education is a public good," and, "Minnesota 's most precious resource is its people. If I have one hope for this powerful system, it is that the leaders of today like the leaders of the past, do not lose sight of the public good higher education provides. The state's future depends on it."

Trustee Despins urged the Board members to support the proposed amendment and to add the $62.9 million to the budget request. Trustee Vincent Ijioma stated that he supports the amendment adding that the request should reflect the needs and the request be presented accordingly. Trustee Despins requested that the Board vote with their conscience and not let their political views enter into their decision.

The amendment to the motion failed with five in favor (Trustees Despins, Dusek, Ijioma, Moran and Paskach), seven opposed (Trustees Benson, Choate, Dickson, Hightower, Olson, Renier and Schultz). Trustees Antell and Curme Shaw were absent.

The original motion carried with seven in favor (Trustees Choate, Dickson, Dusek, Hightower, Paskach, Renier and Schultz), four opposed (Trustees Benson, Despins, Ijioma and Moran), and one abstention (Trustee Olson). Trustees Antell and Curme Shaw were absent.

Trustee Duane Benson explained that he opposed both motions as he feels the system can use its resources more effectively by attracting students with incentives where there is capacity and then moving students into vocations by those incentives. He commented that this cannot be done in the current system. He added that as an example, the scholarship gift from The Schwan Food Company to Southwest Minnesota State University did not go to the system, but rather directly to the students for their particular needs. Chair Hoffman stated that funding models for higher education will be a major topic agenda item at the November retreat.

Amendment to Real Estate Transaction Policy 6.7 (First Reading )
Committee Chair Hightower reported that the committee heard a first reading on the Amendment to Real Estate Transaction Policy 6.7. This will be an action item at the December meeting.
Office of the Chancellor Location Planning
Committee Chair Hightower reported that the committee heard a report on the Office of the Chancellor location planning. Lease agreements will expire in July of 2005 at the Energy Technology Center and in October of 2007 at the Wells Fargo Place locations. The real estate advisory firm of Nelson, Tietz and Hoye has been engaged to assist in formulating recommendations. This will be an agenda item at the January meeting.

Technology Committee, Lew Moran, Chair

Information Technology Update
Committee Chair Lew Moran reported that the committee heard an update from Vice Chancellor Ken Niemi on the current issues and work related to Information Technology.
Security Issues Update
Committee Chair Moran reported that the committee received an update on security issues from Vice Chancellor Ken Niemi and Internal Auditor John Asmussen. The report provided a review of information security issues, actions taken to address the issues, and plans for future enhancements to the security environment.
Data Warehouse Overview
Committee Chair Moran reported that the committee heard an overview of the Data Warehouse. The presentation reviewed the process of maintaining a vast amount of data that supports many key reports.

Requests by Individuals to Address the Board
There were no requests to address the Board.

Other Business
Chair Hoffman reminded the Board members of the November 15-16, retreat. He stated that on the evening of November 15, the Board will discuss the results of the Citizens League report. On the morning of November 16, the Board will discuss funding models for higher education and board governance in the afternoon.

Adjournment
Chair Hoffman adjourned the meeting by consensus at 2:16 p.m.

Recorded by Ingeborg K. Chapin
Board Secretary