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MINUTES OF THE REGULAR MEETING
of the
BOARD OF REGENTS OF THE UNIVERSITY OF WISCONSIN SYSTEM
Madison, Wisconsin
Held in Room 1820 Van Hise Hall
Thursday, August 18, 1994
1:00 p.m.
- President Grebe presiding -
PRESENT: Regents Barry, Budzinski, Dreyfus, Gelatt, Grebe, Gundersen, Hempel,
James, Krutsch, Lubar, MacNeil, Orr, Randall, Schilling, and
Tregoning
ABSENT: Regents Benson and Steil
Approval of Minutes
Upon motion by Regent Dreyfus, seconded by Regent Gelatt, minutes of the
meeting of the Board of Regents held on June 10, 1994, were unanimously
approved as distributed.
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REPORT OF THE PRESIDENT OF THE BOARD
Welcome to Regent Gerard Randall
Regent President Grebe welcomed Regent Gerard Randall, of Milwaukee, who
had been appointed to the Board of Regents to succeed Regent Emeritus Erroll
Davis. A graduate of Marquette University, Regent Randall is a middle school
teacher whose professional experience in the field of education will be a
valuable asset to the Board.
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Report of Regent Members of the Higher Educational Aids Board
With respect to the written report of the July 19, 1994, meeting of the
Higher Educational Aids Board, Regent Krutsch pointed out that, for the
Academic Excellence Scholarship program, alternate scholars must have the same
grade point average as first-chosen scholars in order to qualify.
In response to a question by Regent Grebe, Regent Krutsch said efforts
being made to improve the aid distribution process include consideration of
the federal methodology and the definition of unmet financial need.
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Report of the Vice President of the Wisconsin Technical College System
Board
A written report was provided by Regent Barry, Vice President of the
Wisconsin Technical College System Board.
- - -
REPORT OF THE PRESIDENT OF THE SYSTEM
President Lyall called attention to a number of important achievements in
the UW System during the course of the summer. UW-Madison Professor Efim
Zelmanov was awarded the Fields Medal in mathematics; UW-Stevens Point
received a $500,000 endowment from former Congressman and Defense Secretary
Melvin Laird; the National Education Association named UW-River Falls as one
of 10 colleges nationally having exemplary teacher education programs; and a
$100,000 federal planning grant to establish a statewide manufacturing
extension program was received by a coalition of UW-Extension, UW-Madison, UW-
Milwaukee, UW-Stout and UW-Platteville.
A new master's degree program in manufacturing and technology management
was developed by the UW-Madison School of Business with a gift in memory of
Joyce Erdman, former President of the Board of Regents; awards from the State
Department of Administration for meeting or exceeding the goal of six percent
purchases from minority-owned firms were received by UW-Green Bay, UW-
Milwaukee, UW-Parkside, UWC-Baraboo/Sauk County, UWC-Marathon County, UWC-
Marinette County and UWC-Sheboygan County.
Former Governor and Regent Emeritus Warren Knowles bequeathed a $1
million gift to the UW Law School to endow a faculty chair for the study of
ethics, government and law.
President Lyall announced that System Administration is supporting eight
projects that illustrate innovative uses of information technology. The
purpose is to encourage UW institutions to enhance undergraduate instruction
through innovative applications of instructional and information technology,
to encourage more collaborative, multi-campus and inter-campus projects, and
to support outreach instruction beyond the traditional classroom.
President Lyall called attention to the 1994-95 edition of Introduction
to the UW System, a publication designed as a ready reference for high school
students who are thinking of applying to UW institutions.
- - -
REPORT OF THE EXECUTIVE COMMITTEE
Regent President Grebe noted that minutes of the June 22, 1994, meeting
of the Executive Committee had been distributed. [EXHIBIT A]
- - -
1995-97 BIENNIAL OPERATING BUDGET
Regent President Grebe designated Regent Gelatt, Chair of the Business
and Finance Committee, to preside over consideration of the 1995-1997 Biennial
Operating Budget request.
- Regent Gelatt presiding -
Introducing her presentation on the proposed budget request, President
Lyall noted that it recognizes the state's fiscal pressures, while also
reflecting the responsibility to provide quality instruction, research and
public service to the citizens of Wisconsin.
This budget, President Lyall noted, is being shaped at a time when the
Wisconsin economy is performing exceptionally well. The UW System is a key
part of this success, earning $1.7 billion per year in non-tax support--two
dollars in earnings from non-tax sources for every one tax dollar invested in
the UW System. Since 1989, for example, UW institutions have attracted more
than $1.5 billion in competitive grants to support research that has generated
about $33 million in tax revenues to the state and has trained 137,000
graduates for the state's skilled workforce. Approximately 57 technology-
based companies, employing more than 8,000 people, owe their success to
research discoveries at UW-Madison, and many other examples of contributions
to the state economy can be found throughout the UW System.
Funding for property tax relief, President Lyall stated, must not come at
the cost of diminishing the UW's ability to participate in building future
growth and prosperity in the state. During the past several years, the UW
System has engaged in the continuous process of improving effectiveness, value
and efficiency, with campuses undertaking significant restructuring that
pruned schools, programs and departments. The UW System also has moved to
improve efficient use of faculty through post-tenure review and faculty
workload policies; and it has adopted and reported to stakeholders on 18
accountability goals.
Along with all state agencies, the UW had been asked to convey its budget
in two steps: First, a zero-increase GPR budget with no additional state
funds beyond costs to continue; and second, by November 15, indication of what
five-and-ten percent GPR base reductions would mean for UW students and other
clients. Reductions of this magnitude, President Lyall stated, will affect
access, the cost of tuition, and local economies of campus communities.
Presenting Resolution 6731, President Lyall stated that the UW System
took seriously the challenge to use this opportunity to be more productive and
do business more effectively. The UW System, she commented, has been a leader
in higher education nationally in this regard. In the past three years, $26.5
million has been taken from the base budget and reassigned to top priority
needs; allied health and agriculture and nature resources programs are being
restructured to better meet changing needs; the UW System operates at two-
thirds of the national average in administrative costs; and 238 programs have
been eliminated since merger to create higher priority opportunities. While
these activities will be continued, she noted, a flat budget will not allow
the pace of progress to be maintained.
The operating budget before the Board includes cost-to-continue items, a
fee-based initiative to improve student access to instructional technologies,
anticipated earned income, and statutory language to increase operating
flexibility and to eliminate sunsets on the successful laboratory and
classroom modernization and general computer access programs. Under
Department of Administration guidelines, the budget excludes compensation and
new GPR initiatives.
Cost-to-continue items are expected to increase by $36 million in the
biennium, or 0.7 percent annually. Earned income (non-state revenue), which
also is expected to increase, consists of federal grants and contracts, gifts
and trust fund income, hospital revenues, auxiliaries, and financial aid
funds.
Under a flat GPR budget, 1995-97 average annual tuition increases,
excluding pay plan, would be 1.9 percent. Compensation for faculty and staff,
to be determined later, would increase this figure by 0.8 percent annually for
each one percent pay plan increase. The fee to enhance student access to
technology would increase tuition by one percent for all campuses except UW-
Madison.
President Lyall also asked the Board to support a resolution calling on
the Governor and Legislature to increase state financial aid to keep pace with
tuition.
The proposed budget includes three key initiatives: the technology fee;
accommodation of an additional 750 FTE students in the biennium through
workload and productivity improvements; and reinvestment of $1.6 million in
base resources to meet state needs in allied health.
Turning to supplemental initiatives (Resolution 6732) President Lyall
asked the Board to advance these items to the Governor and Legislature as
investments the state should make, should the funding become available. In
total, these investments would constitute an additional one percent increase
in GPR ($24.8 million) and tuition ($11 million).
The supplemental initiatives address needed improvements in six areas:
(1) $17 million in GPR/fees for undergraduate education; (2) $2.5 million in
GPR/fees to serve an additional 890 FTE students in the second year of the
biennium; (3) $7.6 million--matched by $3.7 million from institutional base
funds--to meet state needs in allied health, primary care, agriculture and
natural resource education, technology transfer, and outreach to Wisconsin
youth; (4) $2 million to contract for expertise to comply with federal
mandates and provide a safer campus environment; (5) $1.4 million to reduce
loan burdens and increase grant assistance for minority and disadvantaged
students; and (6) $5.3 million for distance education.
Noting that many difficult and important decisions are anticipated over
the next several months, President Lyall concluded by making a commitment to
stakeholders: To students, that the UW System will energetically work to
maintain quality of education; to parents and the public, that the UW System
will continue the drive for efficiencies and productivity improvements; to
faculty and staff, that the UW System will assist in the transition to new
teaching and learning techniques to serve students better, to elected
representatives, an invitation to join in keeping the UW System a strong asset
for the entire state.
UW-Milwaukee student Scott Neuhaus and UW-Madison student Joni Schroeder
spoke of the benefits to students of expanded access to instructional
technologies and in support of the proposed technology fee.
Chancellor Grugel, UW Centers, spoke in support of the supplemental
initiative for undergraduate education. Funds would be used to provide basic
supplies, software and materials, inter-library loan activities, upgraded
student advising, and assessment of student outcomes.
Chancellor Kuipers, UW-La Crosse, spoke in support of the supplemental
allied health initiative, citing clear findings of shortages of health care
workers. UW-La Crosse is prepared to match additional state funds with a one-
third match of private contributions.
Chancellor Thibodeau, UW-River Falls, spoke in support of the
supplemental initiative to meet the needs in agriculture and natural
resources. The request for $1.5 million includes $500,000 for environmental
literacy and $1 million for research and outreach.
Regent Dreyfus pointed out that a 0.7 percent annual cost-to-continue
increase does not provide for inflation of three to four percent.
Associate Vice President Sell listed the following cost-to-continue
components: Full funding of 1993-95 pay plan adjustments, fringe benefit cost
increases, represented teaching/project assistant salary/fringe benefit
increases over the two/three percent allowed for 1994-95, salary adjustments
based on 1993-95 classified personnel surveys, removal of positions related to
1993-95 administrative cost reduction, assessed funding of Bureau of Financial
Operations charges, increases in risk management costs, utility cost
increases, telephone rate increases, technical adjustment to special fee
revenue, increases for minority/disadvantaged aid programs to offset tuition,
transfer of the UW-Extension Bureau of Audio Visual Instruction to the
Department of Public Instruction, fringe benefits for state-funded
minority/disadvantaged fellowships, and assessment for local improvements.
Regent Hempel asked if some of these amounts represent continuation of
amounts actually spent in the preceding year and others represent continuation
plus allowance for increase, such as utility and telephone costs. Associate
Vice President Sell replied in the affirmative.
Indicating his general support for the proposed technology fee, Regent
Grebe asked if the fee at UW-Madison will generate a larger dollar amount in
the coming biennium since the same percentage will be applied against a higher
tuition. He also asked if the fee will be reviewed at the end of the
biennium, to determine whether one percent is the right percentage, if a
technology fee is to be included in the succeeding budget.
President Lyall replied that the fee currently is structured to continue
unless stopped. However, it could be reviewed before the next biennium, if
that is the Board's preference.
Regent Krutsch suggested that the fee might be a dollar amount based on
needs, rather than a percentage increase.
Regent Grebe asked if the one percent rate was based on an anticipated
level of need.
President Lyall replied that the actual dollar amount of the needs are
much greater than the amount generated by the one percent fee. When the UW-
Madison fee was instituted in the last biennium, the dollar amount of need
would have required a four or five percent fee, which was considered too high.
The same is true for the other institutions. The one percent level was
determined in consultation with the chancellors and students at their
institutions.
James Byrd, President of The Association of University of Wisconsin
Professionals, stated that his organization responds favorably to the proposed
budget and particularly supports the proposed statutory language to make
faculty and academic staff eligible for state contributions to health
insurance immediately upon employment. TAUWP also supports the proposal to
eliminate the sunset date for laboratory modernization, general computer
access and classroom modernization programs. While also supporting the
student technology initiative, TAUWP regrets that it must be fee-funded.
There is concern that integration of technology into instruction will have an
impact on faculty workload and accountability polices. Finally, Dr. Byrd asked
the Board to consider insertion of language into the budget to recognize the
economic benefits to students of obtaining a college education, even if a
baccalaureate degree is not attained.
David Stacy, President of the United Council of UW Student Governments,
commented first about the student fee for technology, asking if there actually
is a technology gap and, if so, why it was not addressed earlier, when funding
by fee might not have been necessary. He urged the Board to allow the
students of each institution to decide whether or not to implement the fee and
asked the Board to try to obtain some GPR support instead of 100 percent fee
funding. He further suggested that the fee should be a dollar amount instead
of a percentage and that there should be assurance that the money will
directly benefit students and not replace current dollars. Finally, he urged
that initiatives for undergraduate education, particularly improvements in
advising, be made part of the budget an not a supplemental initiative.
1995-97 UW System Biennial Operating Budget Zero Increase
Adoption of Resolution 6731 was moved by Regent Krutsch and seconded by
Regent Budzinski.
Resolution 6731: That in compliance with directives issued by the State
Department of Administration and upon recommendation of
the President of the University of Wisconsin System:
operating budget increases be approved for a Student
Technology Initiative, Cost-to-Continue, and other
Program Revenue funded items and be submitted to the
Department of Administration:
GPR/Fee Increases
Source of Funds
Biennial Amount
GPR
$35,961,500
Academic Fees/Tuition
$20,226,800
Biennial GPR/Fees Total
$56,188,300
Earned Program Revenue Increases
Projected Growth in Gifts and
Federal Grants & Contracts
$150,186,800
Federal Direct Student Loan Program
$121,177,000
Projected Hospital Income Growth
$16,738,000
Auxiliary Enterprises
$10,178,800
Receipt Income, Full-Funding of Pay
Plan, and Assessed Costs
$9,665,400
Biennial Program Revenue Total
$307,946,000
In response to a question by Regent Lubar about Mr. Stacy's use of the
term "technology gap," President Lyall noted that students at UW-Madison now
have to access to E-mail, electronic data bases, and library catalogues not
yet available to students on most other UW campuses. There also is a gap
between UW-Madison service levels and those offered at other Big Ten
universities.
Regent Gundersen commented that the gap will widen if the distance
learning initiatives in the capital budget are transferred to the all-agency
fund. What was received for infrastructure repairs from the all-agency fund,
he noted, was much less than requested.
Regent Tregoning asked why a sunset clause for the technology fee was not
included.
President Lyall replied that it will be necessary to replace equipment as
it becomes obsolete and to meet new needs as they arise. She was sympathetic
with United Council's concern that the one percent rate should be revisited if
there is an unusual increase in tuition resulting from a base budget cut. The
revenues from the technology fee, she added, will be held in a separate
account, to clearly show how those funds are being expended and to make clear
that they are not being used as a substitute for other technology funds in the
budget.
Regent Gelatt noted that the biennial budget requested particular dollar
amounts and therefore specified the maximum amount of the fee that could be
expended.
Reporting that he had received more mail on this issue than any other,
Regent Tregoning commented that students want the technology fee to be
approved. The average student, he felt, would be quite willing to pay an
additional $20 for more access to information resources. While he understood
United Council's concerns, he thought it important that the fee be approved as
proposed.
Regent Hempel commented that it would be unrealistic to view the limit on
available resources as a temporary circumstance, when it may well be a signal
of what is to come for the next five to ten years. She noted that the Board
should express appreciation for the difficult challenges faced by chancellors
in reprioritizing to meet the highest needs. This situation is unlikely to
change, she cautioned, given the mood of the taxpayers.
It was Regent Hempel's position that at least two of the supplemental
initiatives--distance education and primary health care--should be included in
the operating budget and funded by reprioritizing the necessary amounts from
the base budget. While the one percent reallocation for the UW System's
Quality Reinvestment Program is commendable, she commented, it is quite a
small reallocation in comparison to what is occurring in many other
institutions and businesses around the country.
Regent Orr asked if further reductions in administrative expenditures
were contemplated in the coming biennium.
Replying in the affirmative, President Lyall indicated that System
Administration and the UW institutions will continue to restructure and
reorganize. Noting that the UW's 6.3 percent rate is considerably below the
average of 9.5 percent for administrative costs, she said proposals may be
forthcoming that the Board request the Legislature to discontinue some
administrative responsibilities.
Regent Orr thought the peer group average to be of less interest than the
benchmark as to which institution is lowest and most efficient in utilization
of administrative costs.
Regent Gundersen cautioned against placing too much emphasis on
administrative cost reduction. He felt satisfied that the intent is to trim
these costs as much as possible.
In response to a question by Regent Krutsch, Executive Assistant Bove
explained that academic deans are placed in the academic support category
which is not always included in administrative costs. Department chairs are
included in the instructional category rather than the administrative
category.
Regent Krutsch felt it important to take those costs into account when
computing total administrative costs. With respect to the matter of
reprioritization, she agreed with Regent Hempel that items such as the allied
health initiative and the distance education initiative should be made part of
the budget regardless of whether funding is provided by the Legislature.
Regent Schilling commented that the Board could best achieve results by
focusing on prioritizing programs and leaving to the chancellors decisions
about how best to achieve efficiencies in their administrative costs.
Regent Budzinski spoke in support of Regent Orr's suggestion that
benchmarking should be done with respect to administrative costs and that the
UW System should follow the best and most efficient model.
Regent Gelatt noted that the UW System had taken part in a national
benchmark study, but that the study suffered from problems with data
comparability and definition. Since higher education seems to have a way to
go before achieving successful benchmarking, he suggested that the UW System
institutions might establish comparability and benchmark among themselves.
Regent Orr remarked that in recent years, there had been great change in
the way bureaucracies are staffed. Noting that 6.3 percent of the UW System
budget is a large number, he commented that streamlining the bureaucracy would
free those saved dollars to better serve the students and the state.
The question was put on Resolution 6731 and it was adopted unanimously.
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1995-97 UW System Supplemental Initiatives
Regent Gundersen moved adoption of Resolution 6732, and Regent Tregoning
seconded the motion.
Resolution 6732: The Board of Regents has identified certain
supplemental investments for which it requests
consideration should additional State funding become
available. The Board directs the President to convey
these as outlined in 1995-97 UW System Supplemental
Initiatives to the Department of Administration.
Regent Lubar commented in support of submitting a zero-increase budget as
requested by the Department of Administration and also submitting supplemental
initiatives, totaling a one percent increase, in areas of highest importance.
Regent Gelatt observed that the resolution makes a public statement about
what the Board views as crucial to the future of the institution. Given the
constraints of the current budget process, he considered the supplemental
initiatives the forum in which those points can be made most effectively.
Regent Gundersen stated his agreement with Regent Gelatt's comments.
Regent Grebe expressed agreement with Regent Hempel with regard to the
programs enumerated in the supplemental initiatives. If he thought this were
the end of the process, he would have a different view toward the approach
being taken. Given that this is not the end of the process, however, he
thought the resolution is exactly the right approach in underscoring the
importance attached by the Board to those initiatives.
Put to a vote, Resolution 6732 was adopted unanimously by the Board.
Support for Financial Aid
Moving an alternative to the resolution provided in the agenda materials,
Regent Krutsch explained that, since tuition is less than one-third of student
costs, an eight or nine percent increase in tuition should not cause an
increase of eight or nine percent in financial aid. The motion was seconded
by Regent Barry as follows:
That the Board of Regents endorses the principle that
GPR financial aid and graduate assistant support
increases should be at levels that offset increases in
tuition and fees, in recognition of the important role
financial aid plays in keeping college affordable for
Wisconsin students and families and encourages the
Governor and Legislature to adequately fund state-
supported financial aid programs.
After discussion, and with the understanding the minutes will reflect the
concern raised, Regent Krutsch withdrew her motion and Regent Barry withdrew
his second.
Upon motion by Regent Dreyfus, seconded by Regent Grebe, Resolution 6733
was adopted unanimously by the Board:
Resolution 6733: That, upon recommendation of the President of the
University of Wisconsin System, the Board of Regents
endorses continuation of the current Board policy that
"GPR financial aid and graduate assistant support
increases should be kept commensurate with general
tuition increases" in recognition of the important role
financial aid plays in keeping college affordable for
Wisconsin students and families and encourages the
Governor and Legislature to adequately fund state-
supported financial aid programs.
Regent Gelatt directed that the minutes express the understanding that
tuition is not the full cost of education, and the intent of financial aid is
to be kept commensurate with increases in the cost of education.
- - -
The meeting was recessed at 3:15 p.m. on August 18, 1994, and reconvened
at 9:10 a.m. on August 19, 1994.
- President Grebe presiding -
Present: Regents, Barry, Benson, Budzinski, Dreyfus, Gelatt, Grebe,
Gundersen, Hempel, James, Krutsch, Lubar, MacNeil, Orr, Randall,
Schilling, Steil and Tregoning.
Absent: None
REPORT OF THE PRESIDENT OF THE BOARD
Report of the Chair of the Council of Trustees of the UW Hospital and
Clinics
Regent Orr, Chair of the Council, reported that Chancellor Ward advised
the Council that he has assumed the role of Vice Chancellor for Health
Sciences with his Executive Assistant Wayne McGown interacting with Deans and
the Hospital Superintendent on a day-to-day basis.
The Council of Trustees recommended that the Board of Regents at it's
September meeting approve engagement of a consultant (funding to be provided
by Hospital) to assist in planning and budget development of a new ambulatory
care facility on the east side of Madison and to obtain a purchase option for
land to accommodate this facility development. This is an important
initiative for the Hospital, Regent Orr pointed out, in a growing area which
provides a good source of patients for the clinical mission.
Modification of Hospital Budget
The Council passed a resolution to recommend to the Board of Regents that
the Hospital budget be modified to increase the expenditure level from
$271,500,000 to $276,000,000, to cover an increase in anticipated expenditures
required toward University Health Care and Health Professionals, consistent
with the Governor's waiver, and relating to the development of a provider
network by the Hospital.
It was moved by Regent Orr, seconded by Regent Gundersen and carried
unanimously that the following resolution be adopted by the Board of Regents:
Resolution 6734: That, upon recommendation of the Chancellor of the
University of Wisconsin-Madison and the President of
the University of Wisconsin System, the University of
Wisconsin Hospital and Clinics' 1994-95 budget be
increased by $4,500,000 to a total expenditure level of
$276,000,000. The increase in expenditure level will
allow for direct support of the managed care network
under a contract between the University of Wisconsin
Hospital and Clinics and University Health Care, Inc.
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Reorganization
Regent Orr reported that the Council reviewed in detail a proposed form
of organization to be used by the Hospital when engaging in private/public
partnerships, which are increasingly important for accomplishing its mission.
The Council approved a resolution to create a Medical Center Corporation,
appointed by the Chancellor (Chapter 181-501(c)(3) Corporation); Wisconsin
Regional Partners (Chapter 181 Membership Corporation); University Health
Care, Inc., U-Care HMO and Health Professionals. The latter three
corporations will be private. The proposed structure was developed by the UW
Hospital in conjunction with UW System Legal Counsel and the Attorney
General's Office. The Attorney General, Regent Orr reported, was most helpful
in working through this complex matter. Casey Nagy, of the UW-Madison legal
staff, presented a description and outline the proposed structural changes.
[EXHIBIT B]
Regent Orr commented that this proposal is important in the context of
the university as a whole, given the increasing need for public/private
partnerships in the face of the declining ability of the state to provide
support to the institution.
Regent Gundersen emphasized the urgency of this matter as essential to
the Hospital's successful functioning.
Regent Schilling asked how this structure compares with what is being
done in other states.
In response, Regent Orr observed that the objectives this structure would
realize in terms of integrating components of the health care apparatus is
what all major academic medical centers are attempting to do. Given the legal
situation in Wisconsin, this is as close to the desirable goals of other major
centers as can be approximated within the constraints identified by the
Attorney General's Office.
In the larger context, Regent Krutsch added, this proposal will allow the
university to fulfill its main mission of medical and nursing education by
providing an adequate patient base for the hospital.
Regent Gelatt asked if the purpose of the private sector organizations in
the structure is to provide primary care and feed into secondary and tertiary
care at University Hospital.
Replying in the affirmative, Regent Orr said large consumers of medical
services want one provider for the whole range of primary, secondary, and
tertiary care--something which University Hospital standing alone cannot
offer. It is important that the university develop that capability for two
reasons. First, because primary care is of increasing importance, the Medical
Center's ability to train physicians to practice in this field must be
strengthened. Second, close to 50 percent of the Medical School budget comes
from Hospital revenue, as does significant portions of the budgets of the
Schools of Pharmacy and Nursing. Maintaining adequate patient flow to the
Hospital is vitally important to the educational missions of these schools.
Regent Gelatt observed that many HMOs do not own medical facilities, but
rather operate through contractual arrangements among medical care providers.
This proposal seemed to presuppose that the model of contractual arrangements
without physical ownership would not work as a primary care feeder system for
UW Hospital.
Regent Orr noted that the purpose of the proposal is to provide a device
by which the purchaser of medical care can be provided with the whole gamut of
services that are required. This could involve other HMOs and other
providers, in addition to Health Professionals Inc. Networks are being
constructed rapidly by others, he said, and this format will allow UW Hospital
to participate in forming such relationships.
In response to a question by Regent Barry, Mr. Nagy explained that
Wisconsin Regional Partners will have the right to audit University Health
Care's books as to flow of funds it provided. In addition, University Health
Care will need to obtain the approval of the funding source for a proposed
venture before it can expend funds. By these means, accountability to the
public sector partners will be provided.
- - -
1995-97 BIENNIAL CAPITAL BUDGET
Regent President Grebe designated Regent Dreyfus, Chair of the Physical
Planning and Development Committee, to chair this portion of the meeting.
Introductory comments by Regent Dreyfus
Regent Dreyfus commented that the capital budget recommendations are
prudent and responsible, with projects carefully prioritized and a great
number of worthy projects deferred in order to stay within guidelines
established by the Department of Administration. The $73 million being
recommended will enable progress to be made in adapting buildings to
accommodate modern instructional and research methods and putting in place the
infrastructure to enable the UW to move forward in distance education.
The fact that important projects were deleted to stay within the defined
limit, Regent Dreyfus stated, is evidence that needs are not being fully met,
but that the projects being advanced are essential and should be supported.
This is the message he felt the Board should send to the Department of
Administration and the Legislature.
Noting that a well-planned program has been developed to address the
backlog of deferred maintenance, Regent Dreyfus indicated that, while progress
is being made, there must be an ongoing commitment to these needs. Finally,
he emphasized the importance of the WISTAR program in funding research
facilities which enable the UW to maintain its market share of research
grants, expand knowledge and promote economic development.
In conclusion, Regent Dreyfus pointed out that the capital budget
recommendations primarily address adaptive re-use and repair of facilities,
with very little new construction. He considered these recommendations to be
sound and deserving of support.
Presentation by President Lyall
Introducing her presentation, President Lyall stated that the Board has
taken vital steps to ensure that UW System facilities can effectively and
efficiently meet the challenges of the 21st century: A ten-year plan to
eliminate the backlog of deferred maintenance has been implemented; long-range
development plans for all campuses have been updated; and comprehensive space
use planning has been undertaken to make better use of existing facilities.
The Board, she noted, has stewardship responsibility for 1500 facilities
with a replacement value in excess of $4.2 billion. Seventy percent of these
facilities are over 25 years old, and 30 percent are over 35 years old. Many
have not been updated since original construction. Rather than building new
facilities, the 1995-97 Capital Budget focuses on adapting existing space to
meet the educational needs of today and tomorrow. This approach is
comprehensive and will enable use of buildings and space to maximum efficiency
in an era of scarce resources.
Funding sources for the Capital Budget are GPR bonding, program revenues,
and gifts/grants. The GPR bonding request of $212.1 million is designed to
leverage a significant investment of non-tax dollars--more than one dollar for
every two dollars of state investment. In accordance with the high priority
placed by the Board on making better use of existing space, over 90 percent of
GPR dollars in this request will be devoted to repairing or replacing existing
space. New space has been recommended only after exhaustive evaluation of
alternatives.
Turning to the WISTAR program, President Lyall described the program as
an extraordinary success in providing urgently needed funding for science,
technology and research facilities. The initial $225 million identified for
this program in 1991-93 included $75 million in outside funds and $150 million
in GPR funds. The initial program was focused on UW-Madison and $111.7
million GPR was provided to launch it. The program then was expanded to
spread benefits across the state, and 19 new projects costing about $48
million have been added since 1991, but without any additional bonding
authority. The 1995-97 Capital Budget recommends projects that would add
about $57 million of GPR to WISTAR needs, bringing the total to $143 million.
Those state funds would leverage an additional $66 million in outside funds
and bring the total non-state contribution to more than $141 million over the
eight-year program.
Concluding her comments, President Lyall called attention to the
integrated priority list for GPR projects over $250,000 [EXHIBIT C]. This
ranking was done following priorities established by the Board of Regents and
with guidance from the Division of Facilities Development, both of which
emphasize maximizing the life of existing facilities.
Presentation by Vice President Brown
Vice President Brown commented that the Board's stewardship of facilities
is challenged by a sizeable backlog in deferred maintenance. In the 1991-93
Capital Budget, the Board established a ten-year plan to eliminate the
backlog. Since then, $117 million has been received, leaving the current
unfunded backlog at $247 million. The proposed 1995-97 budget recommends
$126.5 million for maintenance efforts. This amounts to 60 percent of the
total GPR request.
With respect to distance education and instructional technology, Vice
President Brown noted that the Capital Budget recommendations include a $38.3
million initiative to complement the operating budget initiative to modernize
the learning environment. While UW-Extension is positioned to provide
leadership in distance education, efforts are hampered by outdated facilities
and dispersed programs. Therefore, $12.3 million is recommended to provide a
statewide distance education center through addition and renovation of space
at the Wisconsin Center. This will enable the UW to play a leadership role in
coordinating faculty and K-12 training in use of new learning technologies and
delivery of continuing education to business and communities throughout the
state.
Ten million dollars is recommended for classroom renovation to include
features such as enhanced audiovisual capabilities, interactive and multimedia
instructional facilities, and compressed video. Five million dollars is
recommended to purchase equipment needed to begin delivering courses; $10
million is recommended to complete in-building telecommunications cabling; and
$1 million is recommended to replace outdated broadcast equipment for WHA
radio and TV.
Vice President Brown then turned to the list of thirteen GPR major
projects. Of the total $72.6 million, $26.1 million is for maintenance, $33.8
million is for renovation and replacement, and $12.7 million is for additional
space. System Administration recommended deferral of 14 other GPR major
project requests totaling more than $100 million. Nine recommended WISTAR
projects total $56.9 million in GPR funds and $32 million in outside funds.
The final segment of the Capital Budget consists of 11 projects, totaling
$59 million, funded entirely from gifts, grants and program revenues.
UW-Madison Provost John Wiley commented on the critical importance of the
WISTAR program in providing facilities central to the university's mission.
Approval of state bonding must be in place, he stated, when donors give their
money to support these projects. However, the current bonding level is
insufficient for projects already approved by the Board. The proposed
increase in bonding, therefore, is essential to maintain the intent of this
successful program.
Chancellor Sorensen, UW-Stout, commented that WISTAR at UW-Stout has
resulted in beneficial curricular innovations. The institution has been
successful in leveraging private money with state funds and has also been
successful in attracting grant funding.
Chancellor Hanna spoke of the importance of distance education as a key
to the future. With investment in distance education, the UW can provide
greater access and campuses can more effectively share resources. The
Chancellor presented a video, "From Chalkboard to Keyboard," describing the
benefits of distance education in terms of greater student access, more
effective teaching, a better prepared workforce, and greater ability for the
UW to meet the needs of the state.
Regent Gundersen reported that he had asked for and received assurance
from Vice President Brown that no project had been deferred that would
jeopardize the safety of students and staff.
In response to a question by Regent Krutsch about the WISTAR program,
Regent Dreyfus explained that $111 million was provided initially with the
understanding that the rest of the requested $150 million would be proved
later. The program was expanded and new projects added. However, additional
bonding has not been provided, and the resulting uncertainty presents problems
for those attempting to raise funds for the private match portion of these
projects. If additional bonding is not forthcoming, the successful WISTAR
program will come to an end.
Regent Gelatt pointed out that the original program was composed of $75
million in matched funds and $75 million in unmatched funds. All $75 million
of the matched funds were approved; it was the $75 million for unmatched funds
that have not been fully appropriated. While the Board was recommending
additional projects with matched funds, bonding for projects without matched
funds also was being requested. The largest funding shortfall is in unmatched
projects, for which ability to raise private funds is not an issue.
Matt Blevins, Chair of the Associated Students of Madison, spoke in favor
of the proposed project to renovate the UW-Madison Armory. Benefits would be
to bring student services together in one building, instead of scattered
across the campus, and enable students to become involved more easily in
student organizations and activities. He noted that the project has strong
student support and that the building is a designated historic site which
cannot be demolished. This project would insure that the Armory will be well
used to the benefit of students. In conclusion, he urged the Board to approve
a $2 million private match, rather than the proposed $4 million private match.
Adoption of Resolution 6735 was moved by Regent Barry and seconded by
Regent Grebe.
Resolution 6735: That, upon the recommendation of the President of the
University of Wisconsin System and the several
Chancellors, the projects listed in priority order in
the attachment (Appendix) be approved, and System
Administration be authorized to submit the requests to
the State Department of Administration and the State
Building Commission as part of the 1995-97 Capital
Budget:
a. Thirteen major projects funded by $72,600,000
General Fund Supported Borrowing and $6,034,000
Gifts, Grants and Program Revenue Supported
Borrowing.
b. Infrastructure projects funded by $82,579,700
General Fund Supported Borrowing - All-Agency Funds
and $20,000,000 Program Revenue Supported
Borrowing.
c. Eleven major projects funded by $54,660,700 Program
Revenue Supported Borrowing and $3,900,000 Gifts
and Grants.
Regent Tregoning inquired as to what changes could me made to the Armory,
given its designation as an historic landmark.
Regent Gundersen replied that the exterior must be preserved, and Vice
President Brown added that historically significant portions of the interior
also must be preserved. Use of open office landscaping would be in accordance
with those limitations.
In response to a question by Regent Gelatt as to the process by which
relative priorities of projects are established, Vice President Brown
explained that a series of criteria with weighted numerical values are applied
against each of the projects to determine its ranking. This process is used
at the System level. Each of the institutions use their own processes of
ranking and prioritizing projects.
Regent Gelatt inquired as to how the determination is made as to what is
an appropriate amount of usage for classrooms.
Vice President Brown replied that one standard is that each classroom is
expected to be in use six hours a day, five days a week, and to be two-thirds
occupied at those times. Another standard applies to the size of the
classroom and the sizes of classes being offered in that room. In addition,
space utilization studies are used to identify where there are shortages of
small or large classrooms.
In response to a question by Regent Gelatt as to the origin of the 30-
hour standard, Vice President Brown explained that it is not a Regent policy,
but rather a standard against which to measure the need for additional space.
Many classrooms, he noted, have much heavier use than 30 hours per week.
Regent Gelatt pointed out that if the UW System should be confronted with
a shortage of classroom space, 20 percent additional space could be gained by
asking campuses to schedule seven periods a day. Another five percent of
classroom utilization could be gained by uniform utilization throughout the
week.
Implementing that suggestion, Regent Dreyfus noted, might require a shift
in the current approach to student scheduling.
Put to the vote, Resolution 6736 was adopted unanimously by the Board.
-
WISTAR Funding Increase and Major Projects
Adoption of Resolution 6736 was moved by Regent Randall and seconded by
Regent Steil.
Resolution 6736: Whereas, the WISTAR program was created to help the
University of Wisconsin System and other state agencies
maintain leadership in research and technology, develop
partnerships with industry, and enhance Wisconsin's
economy, and
Whereas, the WISTAR program has been successful in
helping attract and retain quality faculty and
students, and attracting federal and private funding of
programs, and
Whereas, the Board of Regents supports the goals of the
WISTAR program and recognizes that additional funding
is needed to further enhance the educational and
research opportunities within the University of
Wisconsin System,
Now therefore, be it resolved that, upon the
recommendation of the President of the University of
Wisconsin System and the several Chancellors, the
WISTAR program be increased by $143.2 million of
General Fund Supported Borrowing and $66 million Gifts,
Grants and Program Revenues, for a revised program
total of $255 million GPR and $141 million non-GPR; and
that the following WISTAR projects, listed in priority
order, funded by General Fund Supported Borrowing,
Gifts, Grants and Program Revenues, be approved and
System Administration be authorized to submit the
requests and related statutory language changes to the
State Department of Administration and the State
Building Commission as part of the 1995-97 Capital
Budget:
UNIV PROJECT GPR REQUEST
SYS Various Infrastructure Projects $ 541,000
STO Applied Arts Remodeling 6,475,000
MSN E.B. Fred Hall Renovation 10,800,000
LAC* Medical Health Science Center 15,245,000
(Total $28,972,000, includes $13,727,000 PR,
Gifts and Grants)
MSN Environmental Management Center 5,000,000
MSN* Research Greenhouses 3,295,000
(Total $6,590,000, includes $3,295,000 Gifts/Grants)
MSN* School of Pharmacy - Phase 1 15,000,000
(Total $30,000,000, includes $15,000,000 Gifts/Grants)
MIL Lapham Biological Chambers 250,000
SYS GLRF Molecular Probe Center 250,000
TOTAL WISTAR PROJECTS: GPR $56,856,000
Non-GPR $32,022,000
*Matching Program
Stating concern about the projects that do not have matching funds,
Regent Gelatt said the question is whether there is sufficient resolve on the
part of the Governor and the Legislature to proceed with the program as
originally planned. If an increase in funding is not politically feasible, it
would be necessary to rank these projects in relative priority with other
projects of a similar nature in order to move them forward.
Regent Dreyfus added that the first obligation is to set forth the list
of needed projects, including those that we are now behind schedule. He
suggested that the Physical Planning and Development Committee consider what
can be done to address the problem and make a recommendation to the Board.
Regent Gelatt suggested that joint meetings with the Building Commission
might be helpful.
Regent Lubar stated that, on an overall basis, the WISTAR program is one
of the excellent efforts of the university and the state in the last five
years, with an important multiplier effect in terms of the research funding it
attracts. He considered the program to be of the highest priority.
Regent Gundersen commented that, if additional funding is not forthcoming
for WISTAR, the matter should be revisited to place projects such as the
Pharmacy School in high priority in comparison with other projects on the
major project list.
Regent Lubar felt the Board should not think in terms of choosing one
high priority over another. He thought the focus should be on achieving
approval of the WISTAR program and the other priorities that have been set
forth.
Regent Dreyfus commented that it may be necessary to better inform both
the public at large and their legislative representatives about research
results achieved in the UW System and what that research means to people in
their daily lives.
Put to a vote Resolution 6736 was unanimously adopted by the Board.
-
Project Priorities/Deferral of Major Projects
Presenting Resolution 6737, Regent Dreyfus said the intent is to convey
the message that should additional funding become available, these projects
are important and should be implemented
Adoption of Resolution 6737 was moved by Regent Grebe, seconded by
Regents Schilling and MacNeil and unanimously adopted.
Resolution 6737: The Board of Regents recommends that, regardless of the
GPR funding source, the overall priorities reflected in
the attached listing (Appendix), be followed by the
State Building Commission in considering the GPR needs
of the University of Wisconsin System in the context of
the statewide 1995-97 Capital Budget.
Further, in recognition of fiscal constraints, the
$69.3 million in projects listed in priority order on
pages 2 and 3 of the Appendix are deferred at this
time. However, the need for these projects should be
made known to the Department of Administration and
State Building Commission, and implemented if funding
is available.
Finally, the following GPR major projects are deferred
from further consideration in the 1995-97 biennium, and
will not be reconsidered unless resubmitted in future
biennia by the respective Chancellors:
DEFERRED GPR MAJOR PROJECTS
GBY Classroom/Laboratory Building 9.3 M
MSN Art Building 11.0 M
MIL Sabin/Greene Remodeling 7.7 M
MIL EMS Addition, Phase 1 22.6 M
MIL Fine Arts Capital Renewal, Phase 2 4.2 M
RVF Dairy Science Teaching Facility 2.5 M
STO Child & Family Study Center 2.5 M
EXT Friedrick Center Addition .7 M
SYS GLRF Aquatic Biomedical Space 1.7 M
Total Major Projects Deferred: $ 62.2 M
-
At 11:15 a.m., the Board recessed for five minutes, after which the
following resolution, moved by Regent Lubar, was adopted unanimously on a
roll-call vote, with Regents Benson, Budzinski, Gelatt, Grebe, Hempel,
Krutsch, Lubar, Orr and Tregoning (9) voting in the affirmative. There were
no abstentions and no dissenting votes.
Resolution 6738: That, the Board of Regents recess into closed session
to consider appointments to the UW Centers, UW-Green
Bay and UW-Superior Boards of Visitors, and to
consider a naming after a person, UW-Stevens Point, as
permitted by s. 19.85(1)(f), Wis. Stats.; to consider
dismissal of a faculty member, UW-Eau Claire, as
permitted by s. 19.85(1)(b), Wis. Stats.; to consider
compensation matters for UW-Madison and UW System
Administration, as permitted by s. 19.85(1)(c), Wis.
Stats.; to consider negotiations on competitive
matters, as permitted by s. 19.85(1)(e), Wis. Stats.;
and to confer with legal counsel regarding pending or
potential litigation, as permitted by s. 19.85(1)(g),
Wis. Stats.
- - -
CLOSED SESSION ACTIONS
The Board arose from closed session at 1:40 p.m., having adopted the
following resolutions:
Appointments to UW-Superior Board of Visitors
Resolution 6739: That, upon the recommendation of the President of the
University of Wisconsin System and the Chancellor of
UW-Superior, the following persons be reappointed to
the UW-Superior Board of Visitors for three-year terms
ending in 1997:
Mr. Roger Drayna
Judge Michael T. Lucci
And that the following persons be appointed for
three-year terms ending in 1997:
Mr. David F. Oviatt
Ms. Carol M. Stevens
Mr. Reid Haglin
Appointments to UW-Green Bay Board of Visitors
Resolution 6740: That, upon the recommendation of the President of the
University of Wisconsin System and the Chancellor of
UW-Green Bay, the following persons be appointed to
the UW-Green Bay Board of Visitors for three-year
terms ending in June 1997:
Beverly Carmichael
James Kauer
Steven Taylor
That the following persons be reappointed for two-year
terms ending in June 1996:
Mary Eickman
Michael Kaeske
And that the following persons be reappointed for
three-year terms ending in June 1997:
Paul Anderson
Leonard Weis
John Gibson
Dismissal of Faculty Member, UW-Eau Claire
Resolution 6741: That, upon the recommendation of the UW-Eau Claire
Chancellor, the Board of Regents adopts the Order on
the Recommendation for Dismissal for Just Cause of Dr.
Richard Majors from the University of Wisconsin-Eau
Claire.
Compensation for Basketball Coach, UW-Madison
Resolution 6742: That, upon recommendation of the Chancellor of the
University of Wisconsin-Madison and the President of
the University of Wisconsin System, a base salary
adjustment resulting in a new rate of $105,000 for
eleven months (A$114,545), be approved for Stan
VanGundy, Men's Head Basketball Coach, effective July
22, 1994.
Salary for Senior Vice President for Academic Affairs
Resolution 6743: That, upon the recommendation of the President of the
University of Wisconsin System, the annual salary of
David J. Ward, Senior Vice President for Academic
Affairs, be set at $120,000.
- - -
____________________________________
Judith A. Temby, Secretary
September 6, 1994
