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SC.03.08
March 17, 2003

University of Illinois
Urbana-Champaign Senate

Final;Information

SC.03.08 Report on the Meeting of the Board of Trustees, University of Illinois, and of Committees of the Board, February 12-13, 2003

The board convened at 2:15 p.m. on Wednesday, February 12, for its Annual Meeting and Election of Officers, Trustee Kenneth Schmidt, Interim Chair, presiding. Three new trustees were introduced: Robert Sperling, UIUC alumnus and an attorney with Winston & Strawn; Niranjan Shah, co-founder of Globetrotters Engineering Corp., and Devon Bruce, UIUC alumnus and an attorney with Power Rogers & Smith.

The agenda for the Special Order of Business for the Annual Meeting called for the election of board officers, adoption of resolutions, and other actions required at the annual meeting. Trustee Shah nominated Trustee Lawrence Eppley for the position of board chair. The motion was seconded and approved unanimously without discussion. Trustees Schmidt and Thomas Lamont were elected to the board's Executive Committee. Other officers, all incumbents, were elected: Michèle Thompson, Secretary; Stephen K. Rugg, Comptroller; Thomas R. Bearrows, University Counsel; Lester H. McKeever, Jr., Treasurer. Trustee Schmidt was elected chair of the board's Academic Affairs Committee.

The meeting of the Building and Grounds Committee commenced, Trustee Jeffrey Gindorf, chair. Plans for the Alice Campbell Alumni Center were presented by a representative of BLDD Architects, Inc., Decatur. The center will be located on the Urbana campus near the Office of Admissions and Records and the Spurlock Museum, which will necessitate the closing of California Street between Lincoln Avenue and Gregory Place. Trustee Vickrey inquired as to whether the building was designed to accommodate high-speed wireless data transmissions (presumably from outside the building). The architect reported that this had not been a consideration in the building's design. Trustee Vickrey asked that wireless networking be considered in the design of future buildings on the three campuses. For the benefit of the new trustees, Trustee Schmidt explained the several budget thresholds for reporting to the board on capital projects.

The meeting of the board resumed with general discussion. Board members queried university and campus administrators about various proposals on the next day's agenda. Trustee Schmidt asked Provost Herman to explain the nature of the M.S. in Human Factors in the Institute of Aviation, Urbana. Trustee Vickrey questioned rental costs listed in a proposal for Lease of Space, University of Illinois Extension Building in East Moline.

Vice Chancellor Steven Schomberg addressed the trustee's question. Trustee Lamont questioned removal from the agenda of an item providing for the Delegation of Authority to Sell Allerton Farmland to the Illinois Department of Natural Resources for Prairie Restoration. Chair Eppley explained that there had been insufficient time for a public hearing that had been promised to local tenants and landowners. The board will take up the item at its March meeting.

The board went into executive session around 3:30 p.m.; observers and visitors were dismissed.

The meeting of the board reconvened on Thursday, February 13, at about 8:30 a.m. Public comment was heard on the following subjects: against health benefits for same-sex domestic partners; for same; against job cuts on the Chicago campus and for cuts in the university administration's budget; and for increased financial aid awards to undergraduates (direct aid and work-study). (The speaker who called for cuts to the university's administrative budget referred to "Expenditures and Personnel at the University of Illinois, 1986-2001," a report prepared by Jason Hardy and Arthur Lyons of the Center for Economic Policy Analysis and sponsored by the Service Employees International Union. The CEP report was released at a news conference on February 12 at which state Sen. Miguel del Valle [D-Chicago] vowed to introduce legislation to "tighten" financial reporting requirements for the university.

University spokesperson Thomas Hardy disputed the report's findings, noting that UI has among the lowest rates of expenditure for administration in the Big 10. On February 13, as the board met, Governor Rod Blagojevich echoed the CEP report's findings in remarks delivered nearby at Walter Payton College Prep High School.)

After the public comment period, the board convened as a Committee of the Whole. Vice President Chester Gardner delivered the report of the Tuition Committee, "Ensuring Quality and Affordability: Tuition and Financial Aid at the University of Illinois." He observed that elite educational programs provide tangible benefits to their graduates, but noted that in recent years the quality of such programs at public universities has been threatened by the widening salary gap between elite public and private institutions. The situation is worsened by the fact that inflation-adjusted state appropriations to universities like UI are in decline.

He calculated that the lifetime wage premium for an elite public college education is 15.5 percent annually for a student paying full tuition and 19.9 percent for a student on full financial aid. He then reviewed the current distribution of federal, state, and institutional aid to undergraduates: 30 percent of UI students receive full financial aid awards and 50 percent pay less than full tuition (22 percent at UIUC). With the preceding as background, Gardner presented "Guiding Principles for Tuition," which state a commitment to affordability and a belief that tuition rates should be tied to levels of state support. Juxtaposing affordability and quality, he estimated that a 3 percent tuition increase would translate into a 1 percent salary increase for faculty. He then presented "Guiding Principles for Financial Aid," which articulate a commitment to need-blind admissions and a belief that students whose families can pay tuition should do so.

What followed was a proposal for revising the university's approach to awarding financial aid. Among other things, the university would offer MAP supplements from its funds for 8 semesters only, with a ninth semester awarded at the discretion of campus financial aid officers. (MAP supplemental awards are given by the university to bridge the gap between federal and state awards and actual tuition costs. The state used to provide MAP funding for five years, which the university would then supplement. This year there are no fifth-year MAP funds; the university has stepped in to cover the withdrawn state funds and the institutional supplement.) Also proposed was that financial aid officers should be empowered to make MAP supplemental awards available in ways that best serve students and their families. Relevant here is students' unused federal loan capacity. Gardner noted that graduating UI students carry an average loan debt of $14,791.

Their loan capacity is $23,000, leaving $8,209 in unused federal loan capacity. To make sufficient supplemental award funds available, the university proposes to use a portion of any tuition increase to augment the campus financial aid pool such that at UIUC, a 1 percent increase in tuition would augment the financial aid pool by 1 percent. Augmentation would be at a higher rate at UIC and UIS. Trustee Schmidt asked whether students carrying the federal-minimum 12-hour semester course load can graduate in 8 semesters. Campus administrators said that time-to-degree depends on students' programs of study. Trustee Gindorf argued that students should know they must carry a semester load heavier than 12 hours in order to graduate in four years. Chancellor Manning countered by asserting that, because of off-campus employment, many UIC students cannot carry more than 12-hour loads without risk to their academic success.

Chancellor Cantor remarked that time-to-degree is affected by the amount of advanced placement credit a student brings upon admission, an area in which students from rural and underserved high schools are at a disadvantage. Chancellor Ringeisen said that many of the students who transfer to UIS's upper-division programs find that their progress toward degrees is slowed a bit because not all of their lower-division coursework articulates with UIS's offerings. Discussion concluded with Trustee Schmidt wondering how time spent in study abroad programs affects students' progress toward undergraduate degrees.

Trustee Gindorf chaired the meeting of the Committee on Finance and Audit. Michael Provenzano, Office of Business and Financial Services, reported on the university's fiscal affairs, making frequent reference to the "Annual Financial Report, Fiscal Year 2002." The report showed revenues for FY2002 of $3.035 billion and operating expenses of $2.958 billion. Various rankings for core function expenditures were given, including student instruction, research, public service, plant operation and maintenance, etc. Growth in federal grant and contract support was noted, and President James Stukel remarked that such funds are not discretionary and generally follow researchers if they are lured away to another university.

University and foundation private giving enjoyed an exceptionally good year, although university and foundation endowments suffered, as has generally been the case with invested funds nationwide. A chart showing aging of university facilities prompted a request from the trustees for a report on the oldest buildings on each campus that have not been renovated in recent years. The university's debt was reviewed, and trustees discussed the need to move more debt from fixed-rate into variable-rate instruments.

The meeting of the board reconvened with Business Presented by the President. President Stukel called for reports from the three Chancellors. UIUC Chancellor Nancy Cantor announced that microbiology Professor Carl Woese had just won the Crafoord Prize in Biosciences from the Royal Swedish Academy of Sciences, and that a series of important cross-campus scholarly initiatives had been recently inaugurated (copies of relevant pages from the campus website were distributed to trustees). She also made a plea for the renovation of Lincoln Hall, and congratulated student Trustee Keely Stewart for being admitted to the UIUC College of Law.

UIC Chancellor Sylvia Manning announced that her campus had recently filed a bid to establish a Biocontainment Institute and had successfully implemented the Gemini System for online management of patient charts at the UIC Medical Center. She also mentioned Professor Emerita A. LaVonne Brown Ruoff's receipt of the Modern Language Association's Award for Lifetime Scholarly Achievement, and added that two UIC students had been selected for the All-USA Today Academic Team. UIS Chancellor Richard Ringeisen observed that enrollment is up and that applications for fall admission are double what they were last year. Online enrollment is up 25 percent, and Professor Ray Schroeder recently won an award for online teaching. The campus speech and debate team won a national championship in the novice category, and the men's and women's basketball teams are now competing in the NAIA. Elements of the campus' vision statement-to become a premiere public liberal arts institution-have been posted across campus.

Business Presented by the Chair was delivered by Trustee Schmidt. He read a statement, reflective of board consensus, acknowledging the importance of addressing the call for domestic partner health benefits. He said the board needs more time to assess the budget implications of such coverage before taking action. Schmidt then reported on a meeting of the University of Illinois Foundation at which campus advisory committees for endowed chairs were discussed.

Next he reported the "good news" that the research park in Urbana has 12 tenants and is "doing exactly what it should do" to spur economic development. Finally, he urged the university to take an inventory of the research tools it possesses that could be made available to startup and maturing companies located in the research park.

Under Old Business, Trustee Lamont reported that the IBHE, on which he serves, is studying the problem of affordability in higher education. Trustee Marjorie Sodemann reported that there were no merit cases to review.

Under New Business, Trustee Schmidt read a statement in which he reiterated that the board has sole and final authority in the matter of the Chief Illiniwek mascot. Alluding to billboards purchased by Champaign attorney John Gadau, he apologized to Chancellor Cantor for the "senseless assault on her and her family," calling it "misdirected and mean-spirited." He reaffirmed the board's support for the Chancellor.

Items on the Regular Agenda were approved.

The schedule for future board meetings was announced: March 12-13 in Rockford, May 14-15 in Springfield, and July 16-17 in Urbana.

The meeting adjourned at about 12:30 p.m.

Peter Mortensen
UIUC Senate Observer