Board of Regents

Board of Regents' Budget Meeting
November 12, 2002; 8:00 a.m. - 5:00 p.m.
University Commons
University of Alaska Anchorage Campus
Anchorage, Alaska

  PUBLIC COMMENT INFORMATION

Testimony must be directly related to budget matters and tuition and will be heard starting at 8:00 a.m. Comments are limited to three minutes per individual.

MEETING SCHEDULE

TUESDAY, NOVEMBER 12, 2002

8:00 a.m. - 12:00 noon 
Full Board meeting will be held in Room 107. Testimony related to budget matters will be heard at approximately 8:00 a.m.

12:00 noon - 1:00 p.m. 
LUNCH BREAK. Board members and participating staff are asked to go through the UAA Commons Cafeteria.


1:00 p.m. - 5:00 p.m. 
The Full Board will continue its meeting in meeting in Room 107.

5:00 p.m. - Adjourn

Messages can be left at University Commons: phone 751-7200, FAX 751-7281. Messages should indicate that they are for participants in the Board of Regents' meeting.

AGENDA

Agenda
Board of Regents
Meeting of the Full Board

Tuesday, November 12, 2002; 8:00 a.m. - 5:00 p.m.
Room 107 University Commons
University of Alaska Anchorage Campus
Anchorage, Alaska


I.  Call to Order

II.  Adoption of Agenda

MOTION

"The Board of Regents adopts the agenda as presented.

I. Call to Order
II. Adoption of Agenda
III. Testimony Directly Related to Budget Matters and Tuition
IV. President's Report
V. Approval of Natural Resources Fund Budget
VI. Approval of FY2004 Operating Budget Request
VII. Approval of Tuition Rates for FY04 and FY05
VIII. Approval of FY2004-FY2009 Capital Budget Request
IX. New Business
X. Future Agenda Items
XI. Executive Session
XII. Adjourn

This motion is effective November 12, 2002."

III.  Testimony Directly Related to Budget Matters and Tuition

Testimony will be heard that is directly related to budget matters and tuition. Testimony will be limited to three minutes per individual.
IV.  President's Report

V.  Approval of Natural Resources Fund Budget - Reference 1

President Hamilton, Vice President Beedle, and Chief of Staff Johnsen, will be available to answer questions regarding the Land-Grant Trust Funds and/or spending plan. The board will be asked to recommend approval of the budget as presented in Reference 1.

The Natural Resources Fund (NRF) was established to facilitate the distribution of the annual spending allowance from the university's Land-Grant Endowment Trust Funds. Regents' Policy provides that distributions are intended to:

. . . provide a margin of support over and above what otherwise would be possible through traditional state, federal, and private sources . . . At least 40 percent of the undesignated funds ... will be used for purposes related to fisheries, agriculture, forestry, mineral development, and education in areas related to natural resources" (resources-type activities). . .

Regents' Policy also provides that the university president will present an annual budget to the board for approval.

Reference 1 contains a proposed budget for the land-grant endowment spending allowance distribution for FY03. Similar to last year, the budget includes a provision or designation of $436,500 to fund land management operating costs, $150,000 for the NOAA/UA facility and $2,000,000 for the UA Scholars Program prior to making an allocation to resources-type and other programs. This is necessary to meet our commitments for the UA Scholars Program.

As predicted by President Hamilton, the success of the UA Scholars Program has outpaced the ability of our land-grant endowment to cover the cost of the program. The University of Alaska is attracting almost 50 percent of Alaska's top graduates. Subject to the receipt of legislative funding for the FY03 UA Scholars Program funding shortfall, the proposed budget will allow the university to maintain its minimal ongoing commitments to students, faculty, and others for scholarships, the UA Press, and the NRF and other grant programs. The administration anticipates that a separate legislative proposal to fund the program will be initiated during the coming legislative session.

The President recommends that:

MOTION

"The Board of Regents approves the Natural Resources Fund budget as presented in Reference 1. This motion is effective November 12, 2002."

VI.  Approval of FY2004 Operating Budget Request

-

Reference 2
President Hamilton, Vice President Beedle, and Director Pitney will present the proposed FY04 operating budget request.

At the September 13, 2002 Board of Regents' meeting, three FY04 budget scenarios were discussed. Also discussed during that meeting were areas creating uncertainty around UA's FY04 expected budget need. These included fund source shifts, debt payments, the UA Scholars Program and several others. In the time between September and this writing there is a more stable outlook on some of those uncertainties, allowing a more focused and moderate budget request than previously anticipated. Below is a summary of the FY04 Proposed Operating Budget Request. Reference 2 provides significant detail regarding the FY04 Proposed Operating Budget Request.

FY04 Proposed Operating Budget Request Summary
(in millions)

 
FY03
FY04
Proposed
% Change
FY03-04
Total Operating Budget
$611.7
$647.3
5.8%
State Appropriations
211.1
224.7
6.4%
Net State Appropriation Increment FY03-04
-
13.6
-
NGF Receipt Authority
400.6
422.6
5.5%
NGF Estimated Receipts
334.1
369.9
10.7%
Estimated Year-End Actual Operating Budget
$545.2
$594.6
9.1%

The theme for the FY04 budget request is "Preparing Alaska for its Golden Anniversary." The message of UA operating budget follows:

It's Working! The state investment has enable UA to re-energize and build program capacity. UA's programs are responsive to state needs, students and industry partners. UA's trends are on the up swing. The additional programs have attracted new Alaska high school graduates, transfer students from 'outside', part-time students enrolled in training programs, and significant research funding. Enrollment is up 6 percent this fall, the largest 1-year increase in recent history. Externally funded research increased 120 percent since FY99. The University is ready to teach, research and serve, allowing Alaska's students and Alaska to take advantage of its Golden Anniversary.

UA's instructional and research capacity, much of it gained over the last four years, is the machine necessary to leverage state investments and enable the University to successfully fuel Alaska's economic engine. This year's moderate state funding increment request of $13.6 million demonstrates UA's enhanced ability to share in the cost of building and maintaining a responsive and vital state University.

UA is requesting state funding and non-general fund receipt authority in the following categories:

 
General Funds
Receipt Authority
Maintaining a Solid Foundation
$10.0M
$9.3M
Focusing Growth to Meet State Needs     --Health Related Academic and Research Initiatives
2.1M
6.9M
--Student Services, Access, and Retention
1.1M
2.3M
--Outreach, Academic, and Research Initiatives
0.5M
1.5M
--Administrative and Technology Needs
0.4M
2.0M

The Maintaining a Solid Foundation request supports existing contract and policy mandated compensation increases, inflationary fixed costs, and additional non-discretionary costs associated with health care, risk management and new facilities. FY04's request is accelerating the recent trend (FY99-FY02) of funding UA's non-discretionary costs with an increasing proportion of non-general fund revenue. FY04's maintaining a solid foundation state appropriation request is 22% lower than that requested in FY00 and UA expects to fund 48% with non-general fund revenue; compared to less than 20% in FY00.

Focusing Growth to Meet State Needs includes four specific high priority areas. First is the Health Related Academic and Research Initiatives category that contains the industry sponsored nursing program expansion, the biomedical research program, the state partnership in training and evaluation programs for substance abuse, and several allied health workforce development programs. UA is taking a leadership role in addressing the health related workforce and applied research needs in Alaska.

The President recommends that:

MOTION

"The Board of Regents approves the FY2004 operating budget request in accordance with the plan as presented. This motion is effective November 12, 2002."

VII.  Approval of Tuition Rates for FY04 and FY05

-

Reference 3
Regents' Policy provides that:

"Tuition rates for each academic year (fall through summer) will be adjusted for inflation … unless otherwise determined by the Board of Regents. Notice of the adjusted rates for the second subsequent academic year will be provided annually to the board, Coalition of Student Leaders, and the System Governance Council prior to April 15… Such rates will be deemed approved after the first regular meeting of the board following November 1 … unless the board suspends implementation of the scheduled rate adjustment, or the university president notifies the board of an alternative recommendation, prior to that board meeting. …The university president shall notify the board of recommended changes in regular tuition rates, other than the inflation adjustment described … above, prior to the first meeting of the board after September 1 of the year preceding the year in which the proposed change(s) will take effect… "

The policy further provides that:

"Notwithstanding… other provisions of this policy, the Board of Regents reserves the right to change tuition rates at any time, with or without notice, in such amounts as the board, in its sole judgment, considers appropriate and in the best interest of the university."

Notification was given to the board and the university community on September 13, 2002 that the administration is proposing a supplemental tuition increase for the 2004 academic year of approximately 6.4 percent, in addition to the inflation-adjusted (HEPI) increase of 3.6 percent previously authorized in accordance with Regents' Policy. Therefore, the total proposed tuition increase for AY2004 is 10 percent. The administration is also proposing a 10 percent increase (to include HEPI at an estimated rate of 4.2 percent) in tuition for AY2005.

The table below reflects the revised and proposed tuition rates for AY2004 and AY2005.

Comparison of Inflation Adjusted and Proposed Tuition Rates
for AY2004 and AY2005 ($/credit hour)

 
AY2003 Current Year
Tuition Rates
AY2004 Inflation-Adj.
Tuition Rates
AY2004 Proposed
Tuition Rates
AY2005 Proposed
Tuition Rates
Lower Division        
PWSCC
70
73
77

85

Kodiak
71
74
78
86
All Others
82
85
90
99
Upper Division
93
96
102
112
Graduate
184
191
202
222
Nonresident Surcharge
174
180
191
210

The President recommends that:

MOTION

"The Board of Regents approves the supplemental tuition increase of 6.4 percent in addition to the already approved inflation-adjusted (HEPI) increase of 3.6 percent for AY2004. The total tuition increase for AY2004 will be 10 percent. The Board of Regents also approves a 10 percent tuition increase for AY2005. This motion is effective November 12, 2002."

VIII.  Approval of FY2004-FY2009 Capital Budget Request

-

Reference 4
President Hamilton, Vice President Beedle and Director Pitney will present the proposed FY04-FY09 capital budget request.

In addition to the proposed FY04-FY09 capital budget request, Reference 4 contains the FY04-FY09 capital request guidelines approved in June 2002 as well as definitions for facilities from Board of Regents' Policy. The proposed FY04-FY09 capital budget request includes project requests that fit within the Board of Regents' approved guidelines and aggregate the board's directed state appropriation funding target.

A summary of those projects with funding requests in FY04 is provided with proposed priority listing. The proposed prioritization was developed using Business Council and Statewide Executive rankings with respect to board approved guidelines and input from Board members during the September and October 2002 Facilities and Land Management committee meetings.

The proposed FY04-FY09 capital budget request is presented in themes which reflect the needs addressed in UA's proposed operating request.

1. Maintaining a Solid Foundation
2. Attracting and Retaining Students
3. Preparing for Alaska's Employment Needs

These themes better communicate UA's underlying goal of supporting economic diversification and development in the state of Alaska. However, the thematic categories are different from the capital request categories established with objective criteria for prioritizing similar projects by need and impact.

1. Other (Small Business Development Center)
2. Academic Equipment
3. Administrative (Communications) Equipment
4. Life, Safety, Code and ADA
5. Minor Renewal
6. Major Renewal
7. Land and Property Acquisition
8. New Construction

Pages 14 and 15 of Reference 4 show the proposed FY04-FY09 capital budget request by theme, and pages 16-19 show the proposed FY04-FY09 capital budget request by the board-approved categories.

The President recommends that:

MOTION

"The Board of Regents approves the FY2004-FY2009 capital budget request in accordance with the plan as presented. This motion is effective November 12, 2002."

IX.  New Business

X.  Future Agenda Topics

XI.  Executive Session

MOTION

"The Board of Regents goes into executive session at _________ A.S.T in accordance with the provisions of AS 44.62.310 to discuss matters the immediate knowledge of which would have an adverse effect on the finances of the university related to litigation and labor; and matters that would affect the reputation or character of a person or persons including personnel matters. The session will include members of the Board of Regents, President Hamilton, General Counsel Parrish, and such other university staff members as the president may designate and will last approximately _____ hour(s). Thus, the open session of the Board of Regents will resume in this room at approximately _______ A.S.T. This motion is effective November 12, 2002."

(To be announced at conclusion of executive session)

The Board of Regents concluded an executive session at _____ A.S.T. in accordance with AS 44.62.310 discussing matters the immediate knowledge of which would have an adverse effect on the finances of the university; and matters that would affect the reputation or character of a person or persons. The session included members of the Board of Regents, President Hamilton, General Counsel Parrish, and other university staff members designated by the president and lasted approximately ______ hour(s).

XII.  Adjourn
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