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Home » Board of Regents » Meeting Minutes » 2000

Meeting Minutes - April 2000

Minutes of the Meeting of the Board of Regents of the University System of Georgia
Held At Georgia State University, Atlanta, Georgia
April 18 and 19, 2000

Quick Finder: -- select from menu and click Go -- Committee on Finance & Bus. Operations (1) Call to Order (day 2) Student Honor: Georgia Perimeter College Special Presentation on GSU Teaching Hospital Committee Audit Committee Committee on Finance & Bus. Operations (2) Committee on Real Estate & Facilities Committee on Educ., Research, & Extension Committee on Organization and Law Chancellor's Report to the Board Strategic Planning Committee Unfinished, New Business

CALL TO ORDER

The Board of Regents of the University System of Georgia met on Tuesday, April 18 and Wednesday, April 19, 2000 in the Court Salon of the Student Center Ballroom on the campus of Georgia State University. The Vice Chair of the Board, Regent J. Tom Coleman, Jr., called the meeting to order at 1:00 p.m. on Tuesday, April 18, 2000. Present on Tuesday, in addition to Vice Chair Coleman, were Regents Thomas F. Allgood, Sr., Juanita P. Baranco, Connie Cater, Joe Frank Harris, Hilton H. Howell, Jr., George M. D. (John) Hunt III, Edgar L. Jenkins, Charles H. Jones, Donald M. Leebern, Jr., Elridge W. McMillan, Martin W. NeSmith, Glenn S. White, Joel O. Wooten, and James D. Yancey.

ATTENDANCE REPORT

The attendance report was read on Tuesday, April 18, 2000 by Secretary Gail S. Weber, who announced that Chair Kenneth W. Cannestra had asked for and been given permission to be absent on that day.

APPROVAL OF MINUTES

Motion properly made and duly seconded, the minutes of the Board of Regents meeting held on March 7 and 8, 2000 were unanimously approved as distributed.

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COMMITTEE ON FINANCE AND BUSINESS OPERATIONS, "COMMITTEE OF THE WHOLE"

Vice Chair Coleman convened the meeting of the Committee on Finance and Business Operations as a Committee of the Whole and turned the chairmanship of the meeting over to Regent White.

Chair White explained that this is the time of year in which the Board of Regents allocates funds from the budget to the institutions. He noted that the University System experienced lower enrollments in the past year as a result of the semester conversion. Nonetheless, the legislative session was good to the System. Chair White thanked the Regents and the Central Office budget staff for their hard work during the legislative session. There were four action items that the Board would address as a Committee of the Whole: fiscal year 2000 budget allocations (Item 1, pages 19 to 22), fiscal year 2000 tuition and non-resident fees (Item 2, pages 22 to 23), fiscal year 2000 mandatory student fees (Item 3, pages 23 to 24), and the fiscal year 2000 salary administration policy (Item 4, page 24). He then turned the floor over to the Chancellor, who would begin the budget presentation.

Chancellor Portch thanked the Regents and the staff, in particular Vice Chancellor for External Affairs Thomas E. Daniel, for their efforts in the legislative session. He also thanked the Governor and the legislature for their responsiveness to the needs of the University System. The Chancellor stressed that the Governor still has to sign the budget bill, so everything presented at this meeting would be contingent upon his ultimate signature. However, since the budget reflects the Governor's recommendations throughout the process, the Chancellor was confident the Governor would sign the bill. He noted that in addition to himself, Senior Vice Chancellor for Capital Resources Lindsay Desrochers, Associate Vice Chancellor for Fiscal Affairs William R. Bowes, and Interim Senior Vice Chancellor for Academic Affairs Beheruz N. Sethna would be making this budget presentation to the Board. The supplemental budget includes $33 million for the health insurance reserve; $7 million for data network improvements; $4 million for Georgia Library Learning Online ("GALILEO"); $163 million for capital projects, including equipment for previously approved projects; and $15 million in matching funds for the Equipment, Technology, and Construction Trust ("ETACT"). Chancellor Portch remarked that he was particularly pleased with the funding of capital projects and reminded the Regents that the Board will add to its five-year rolling capital outlay list at the June 2000 meeting. Next, the Chancellor discussed the formula budget, noting that this is the Board's number one priority and stressing the particularly complex year the University System had experienced due to semester conversion. The formula itself was not "technically friendly" to the conversion, he explained, and this was the year in which the enrollment drop was accounted for. The Governor developed a creative approach to the formula budget in an effort to make the System's operating budget whole. He did that by first putting $47 million in this year's budget for the formula. He then asked the University System to reduce its budget this year by approximately $24 million on the basis that the formula year for which the System is currently being funded was at a higher enrollment level than this year. Finally, if the System could reduce its budget by that amount, the Governor would match up to that amount in next year's supplemental budget. This will essentially provide a complete operating budget with the support of the Governor and legislature next year. This was the Board's primary priority, and the Chancellor remarked that it was executed very well.

Chancellor Portch reported that the System was also given a 3% salary increase by the legislature. Because of the consecutive number of years in which it was granted higher increases, the System could handle a smaller increase, he explained. However, the Board will have to monitor closely salary increases in other state university systems this year so that the competitive position of the University System of Georgia is ensured. The Chancellor remarked that the good news about this is that the consecutive years of strong salary increases mean that even if the University System has fallen behind, it should not take another five or six years to become competitive again. The staff will be reporting back to the Board on this matter. Chancellor Portch noted that the implementation date for the salary increase was postponed until fall semester for faculty and until October 1, 2000 for all other System employees. From the perspective of the Office of Planning and Budget, this brings the start date for System salary increases into conformance with the start date for other State agencies. He remarked that the institutions will have to remind their employees that this follows many good salary increases in the last several years.

Next, the Chancellor discussed the tuition and mandatory fee strategy. He noted that in Georgia, there is a traditional 75%/25% cost split between State support and tuition, respectively. That represents strong State support for higher education. Many other states have been increasing the percentage of the cost to students. The budget staff present the tuition recommendation to the Board in April because it is a month after the legislature has established the formula budget. From that, the staff calculate the students' 25% share of cost, which resulted in a tuition increase of 3.8% this year. Chancellor Portch noted that mandatory student fees have been discussed by the Board quite a bit this year, and a good deal of research has been done on this issue. At the March 2000 meeting, the Chancellor had provided to the Regents some general information about mandatory student fees. Prior to this meeting, the Regents received more detailed information with regard to comparable institutions in Southern Regional Education Board ("SREB") states. Chancellor Portch stated that the staff are particularly pleased this year to recommend implementing technology fees Systemwide. Moreover, the presidents and student government leaders are in uniform agreement and enthusiasm about this implementation. A number of states have had technology fees for some time, explained Chancellor Portch. He said that one of the great advantages of being a multi-campus system is that the University System could take a few years to pilot the technology fees at four institutions to learn some lessons about how to successfully implement such a program. Consequently, the System is now ready to have a very effective program. In the newspaper that morning, Student Advisory Council Chair John M. Fuchko III had been quoted as saying that he felt he got his money's worth from the technology fee at Kennesaw State University ("KSU"), one of the four pilot institutions. The Chancellor reminded the Regents that in the long term, technology depends on multi-source funding. State funding is crucial, and student funding is crucial. However, strategic partnerships with corporate technology companies will increasingly be the third piece of the puzzle. This year, the staff made a difficult decision to not recommend any other mandatory student fee increases to the Board because of the technology fees implementation. That will cause some hardship at some institutions, he explained, because they are continuing to incur costs as they go forward. However, the importance of implementing the technology fees was such that the strategy this year was to have a relatively low tuition increase, a freeze on all other mandatory student fees, and the full implementation of technology fees across the System.

In closing, the Chancellor noted that in the previous week, the Board of Regents was asked to take on a couple of additional responsibilities on behalf of the State. The first was the transfer of the public library system to the Board of Regents. It was once under the Department of Education. Then, it was transferred to the Department of Technical and Adult Education ("DTAE"). This year, as part of the Governor's Education Reform Bill, the Board has been asked to take responsibility for the public libraries. Chancellor Portch remarked that this was a natural evolution because of the System's success with GALILEO, which all of the public libraries also share. He reiterated that the Governor had not officially signed the budget, so the staff have not yet formally communicated with the libraries. However, as soon as the bill is in place, the staff will begin the transition. There have already been transition meetings with DTAE to make the transition as smooth and positive as possible. The Board's responsibility is limited to the distribution of the State resources for the public libraries, which get the majority of their funding from local sources. So, this is essentially a $33 million responsibility. The Governor has also asked the Board of Regents to take some management responsibility for the Student Information and Accountability System (K-16). The funding for this has been placed in the State Data and Research Center at the Georgia Institute of Technology ("GIT"), which is a small operation. Development of the end-of-course tests and such will have to be outsourced to professional companies, but the Board has been asked to manage that process. Over time, this will likely be a $100 million plus responsibility. The Chancellor remarked that it is a compliment to the Board that it has been asked to take on additional responsibilities on behalf of the State, because it demonstrates the Governor's confidence in the Board's management effectiveness. However, there is a major increase in the budget due to these additional responsibilities that is not a direct increase for University System operating purposes but rather for the additional assignments. This concluded the Chancellor's overview of the budget elements and strategy. He then turned the floor over to Dr. Desrochers.

Dr. Desrochers reiterated that the four action items to be addressed by the Committee of the Whole were the fiscal year 2000 budget allocations, tuition and non-resident fees, mandatory student fees, and 2000 salary administration policy. As the staff began the allocation process this year, they took into consideration the fact that the University System had experienced an unusual year in relation to enrollments. The System experienced an enrollment decline in the formula year, and as such, the staff took a different approach to the allocation of funds to the institutions. They decided to look at a three-year period rather than just this formula year. Dr. Desrochers explained that 50% of the proposed budget allocation is based upon the enrollment trends for the last three years, and 50% is based on the share of the total budget. The staff worked with the System presidents on this principle because the same principle has been applied in working with them to meet the reduction target of $24 million, which Chancellor Portch had already discussed. All of the presidents were comfortable with this approach to budget allocations. Dr. Desrochers noted that allocations do not just start with the formula funding. There are also adjustments for institutional expenditures per equivalent full-time ("EFT") student. Where there are institutions who have a particularly high or low range for per EFT expenditures, the staff have been trying to bring them into an acceptable range of 15% to 20%. The staff also make additions to institutional allocations for the strategic initiatives of the Board which constitute continuing and new special funding initiatives. There are a number of strategic initiatives that have been translated into special funding initiatives, which the Governor and legislature were kind enough to fund. By institution, those initiatives vary.

Next, Dr. Desrochers summarized the actual dollar figures of the budget, which is on file with the Office of Capital Resources. The budget allocation process started with last year's base budget of $1.4 billion. Within that figure is the $24 million that the Chancellor has advised the institutions to reserve in the coming year. Special funding initiatives of $46.8 million are taken out of the budget at the beginning of the allocation process, but the continuation of those initiatives is added back at the end of the process. The enrollment loss adjustment was approximately $103 million, but the Governor gave the University System approximately $47.3 million as a "hold harmless" against that enrollment loss. Dr. Desrochers noted that the Governor's planned match of the $24 million reduction was added at the bottom of the budget, so that both the reduction and the match are included in the budget document. Additional State funds that are added beyond the adjusted base of $1.3 billion include the salary increase. For the teaching institutions, that increase totals approximately $33 million. The salary increase will become effective in fall semester for faculty and on October 1, 2000 for other System employees. Formula and legislative adjustments total $15.7 million.

These relate to the maintenance of new facilities on campuses ($3.4 million) and additional funding for major repair and renovation ("MRR") ($1.6 million). This brings the total for MRR up to $52.1 million. Next month, the staff will be presenting to the Board information on the MRR formula. The other fringes in this figure have to do with the annualization of salary increases from last year and such benefits as worker's compensation, Social Security, and Federal Insurance Contributions Act ("FICA"). That brings the budget to $67.7 million. In addition, special funding initiatives from previous years were added back into the budget formula at approximately $61 million, which includes $43 million for the continuation of all of the existing special funding initiatives but one. In addition to these special initiatives, there are some new initiatives. These include seven endowed chairs at Gainesville College, Georgia College & State University, Georgia Southern University ("GSOU"), Georgia Southwestern State University, Georgia State University ("GSU"), Macon State College, and North Georgia College & State University ($3.5 million). Funding was also provided for the Georgia Global Learning Online for Business and Education program ("Georgia GLOBE") ($1.46 million). The historically black universities ("HBU") initiative contained two parts. One part was $1.1 million for research activities to match federal funds that come to Fort Valley State University. The other part was additional program support for the three HBUs in some strategic areas of program enhancement. The total funding for the HBU initiative was $2.6 million. The Intellectual Capital Partnership Program ("ICAPP") was allotted just over $1 million. The Hispanic program initiative was allotted $375,000 for English as a second language courses and other elements of communication with the Hispanic community. The Yamacraw Mission ("Yamacraw") was granted $8.6 million for research, the planning of a design center, and additional faculty. There is already $9 million in the base budget, so this constitutes over $17 million for this initiative. Dr. Desrochers noted that there will be a presentation to the full Board on Yamacraw at the May 2000 meeting. In summation, Dr. Desrochers stated that these items, including the $24 million match that the System hopes to receive next spring during the amended budget process, bring the total base budget to approximately $1.4 billion for the teaching institutions.

Next, Dr. Desrochers discussed the "B" budget. The "B" budget is a series of special items that are line items in the State budget and add some important enhancements to the overall mission of the University System, such as the Medical College of Georgia ("MCG") hospital and clinics, the cooperative extension and agricultural experiment stations, and two new items. Those items are the public library system ($32.6 million) and the State Data and Research Center at GIT ($34 million). Dr. Desrochers noted that in addition to the $34 million in the "B" budget for the State Data and Research Center, there is also lottery funding of $20 million and an additional $900,000 for the education technology centers. That brings the total for the State Data and Research Center to $55 million altogether.

In summary, Dr. Desrochers explained that the fiscal year 2001 base budget for the University System, not counting the public library system and the State Data and Research Center, totaled $1.629 billion, a 1.3% increase over the fiscal year 2000 base budget. She remarked that for a year in which the System had to deal with a serious enrollment drop, this is very good outcome with which the Board and the staff are pleased. The total State appropriations, including the public library system and the State Data and Research Center, were $1.717 billion, a 6.8% increase. Additionally, there will be tuition revenues in the amount of $451.3 million due to the 3.8% increase that is needed to deal with the formula and salary increase from the State. Mr. William R. Bowes would be discussing the tuition and mandatory student fees in greater detail following Dr. Desrochers conclusion.

The final item that Dr. Desrochers discussed was Item 4 on the agenda, the salary and wage administration policy. She explained that the policy is basically the same as it has been for the last five years, since the beginning of Chancellor Portch's administration. It is based on the principle that employees of the University System shall be evaluated individually and salary increases will be reasonably distributed based on merit in amounts ranging from 0% to 10%. The level of salary increase overall this year is 3%. Individual salary increases that exceed 10% must be justified in writing when an institution's budget is submitted. Salary increases for faculty become effective beginning fall semester 2000, while salary increases for all other employees become effective October 1, 2000. Dr. Desrochers assured the Regents that last year's salary distribution was on a bell curve. A large number of employees are given salary increases right around the average salary increase, while a few others make more or less, depending on their merit. In closing, she turned the floor over to Mr. Bowes.

Before Mr. Bowes began, however, Regent Baranco asked the Chancellor to share his vision for the Board of Regents' role in the public library system.

Chancellor Portch responded that the Board will be more than just a fiscal agent. He reminded the Regents that the Board of Regents is a fiscal agent for a number of agencies, such as Georgia Public Television, which has its own board. Policy issues and the like should be the responsibility of the local library boards. However, GALILEO and other initiatives could contribute to a shared vision of and a greater responsibility to the libraries, which would fit very well with the overall mission of the Board of Regents. He remarked that he hoped the Board will build a greater responsibility than simply a pass-through agency. He asked the Regents to visit their local libraries to show interest in the new responsibility. There is a vacancy for the State library director who would be hired by and be part of the Central Office. However, the Board will not be responsible for the day-to-day management or local policy making. Shared visioning would be an appropriate role for the Board.

Regent Baranco agreed whole-heartedly.

Regent Jenkins asked who would handle the day-to-day management of the local library systems.

The Chancellor replied that day-to-day management is the responsibility of the local librarian reporting to his or her local library board. The Board of Regents' major responsibility is the distribution of the public libraries' share of the State budget, which is approximately $33 million.

Dr. Desrochers added that the $33 million is mostly in grants to local libraries, of which there are 57 districts and over 200 libraries. The Board of Regents has an administrative role in that there is a State library for the blind and handicapped which the Board administers. Additionally, Central Office staff would be dealing with formula funding requirements for local libraries' support services and information technology issues. About 30 staff members with this responsibility will be transferred to the Central Office.

Mr. Bowes thanked his staff: Ms. Shelley Nickel, Budget Director; Ms. Debbie Wike, Director of Financial Systems and Services; Ms. Patti Thompson, Assistant Budget Director; and Ms. Dawn M. Bristo, Budget Analyst. He also thanked Ms. Josephine Pearson, Administrative Secretary, and Ms. Sharon Duhart, Administrative Secretary, who helped create the budget presentation. He explained that he would be discussing the matter of tuition and fees. He noted that the tuition and fees recommendations were included as appendices to the agenda. The staff were recommending a 3.8% increase in undergraduate and graduate tuition rates to partially pay for salary increases and formula related costs. Mr. Bowes explained that this figure is developed by examining where the System stands relative to the formula budget. The University System is required by an agreement with the Governor and legislature to raise 25% of the total formula budget from tuition revenues. The 3.8% increase will generate approximately $21 million in revenue of a total of $451.3 million. About $16 million is due to the rate increase itself, with the balance of $5 million a reflection of the enrollment increase projected for next year. The Chancellor had reported at the March 2000 meeting that Georgia is a low-tuition state based on data taken from a Washington state higher education coordinating council survey. Mr. Bowes explained that the 3.8% tuition increase will approximate $23 per semester at the two-year institutions and up to $46 per semester at the research institutions. The staff also considers the System's professional programs when developing the tuition rate increase. Institutions are allowed to seek approval from the Board to charge differential tuition for professional programs based on the academic marketplace and the tuition charged by peer institutions with similar missions. Over the years, there have been increases in some of the major professional programs, such as the master of science ("M.S.") in management at GIT, the nursing and master of business administration programs at GSU, the medical program at MCG, and the law, pharmacy, and veterinary medicine programs at the University of Georgia. This year, there were very few major adjustments in tuition rates. One was the M.S. in management at GIT. Another was at MCG, where MCG staff have developed a multi-year plan to gradually increase the tuition rate for the School of Medicine over a period of time until the tuition reaches the midpoint of MCG's comparator institutions. Mr. Bowes stressed that all of the tuition changes are consistent with the Board's policy on nonresident and graduate tuition. Nonresident tuition is set at the full cost of instruction, which is four times the in-state tuition rate. Graduate programs are set at 20% higher than the undergraduate tuition.

Next, Mr. Bowes addressed the issue of mandatory student fees. He noted that the Chancellor had already spoken about the technology fees. He reminded the Regents that he had sent them information about how the University System compares with other SREB states with regard to student fees. Generally, Georgia was well below the average of its peer states in many categories of mandatory fees. So, the Board has been fairly conservative over time in setting fee rates. This year, the staff were recommending setting technology fees for all System institutions. The rate would be a maximum of $75 per semester at the research universities and a maximum of $38 for all other institutions, although there are some variants in the rates that were requested and recommended for the four-year and two-year institutions. The staff developed recommendations this year based on a new process adopted by the Board at its February 2000 meeting. The process mandates that there be approval by a campus committee with at least 50% student representation. Because the staff felt it was necessary to go forward with Systemwide technology fees this year, all other fees were frozen for fiscal year 2001. The only exceptions to this were facilities fees for previously approved projects at GIT and GSU. Mr. Bowes reminded the Board of the policy that was adopted at the March 2000 meeting that would allow these fees to go forward and to be HOPE Scholarship eligible. Therefore, the staff were recommending a $54 per semester fee for the previously approved recreation center at GIT and a $2 increase in the Student Center fee at GSU. They were not recommending any other facility fee increases or any new facility fees at this time. In closing, Mr. Bowes turned the floor over to Dr. Sethna, who would provide a bit more information about the technology fees and the basis for the staff's recommendation this year.

Dr. Sethna thanked Mr. Bowes. He reminded the Regents that the technology fees are the result of a pilot project that spans three years of study at four institutions: GIT, GSOU, KSU, and Georgia Perimeter College. After the pilot project, the staff engaged a national consultant, Phil Cartwright, to study how technology fees are actually used on campuses and whether the fees are achieving the desired effect. The consultant reported that the fee was used for upgrading older equipment; developing staff, student, and faculty training programs; upgrading wiring and electronics; identifying software; and enriching the educational experience. Dr. Sethna stressed that the key point is that the technology fees are an intrinsic part of the academic experience. The report concluded with two thoughts. First, some technology purchases are made at institutions when end-of-year funds become available. Dr. Sethna stressed that when something is intrinsic to the educational process, it should be part of the funding mechanism, not an afterthought. Secondly, the consultant recommended that consideration be given to continuing technology fees at the pilot institutions and implementing such fees at all institutions. As a president, Dr. Sethna remarked that he was delighted the Governor wrote this into his budget proposal. However, it does not matter what the presidents want, he said; rather, what the students want is most important. He stressed that there was student involvement and support for the technology fees from the institutions. The students were eager to have this fee because they saw its potential benefits to their education. The benefits of the technology fee are that it will add value and richness to the students' educational experiences, it will help the institutions stay current with technology, and it will provide a shorter replacement cycle for more equipment as well as help desks and support services for students. Georgia's employers demand and deserve no less. Dr. Sethna then stepped down.

Chair White asked whether the Regents had any comments or questions. He reiterated that the four actions up for approval at this time were the budget allocations, tuition and nonresident fees, mandatory student fees, and the salary and wage administration policy. Seeing that there were no questions or comments, he asked for a motion to approve the items.

Regent Leebern made a motion to approve all of the items, and the motion was variously seconded.

Chair White called for a vote, and all of the Regents voted to approve the four items. In closing, he again thanked Dr. Desrochers and her staff for working diligently on the allocation process in such a short period of time. He then asked for a motion to adjourn the meeting into its regular session. With motion properly made, variously seconded, and unanimously adopted, the Board was reconvened in its regular session.

There being no further business to come before the Board, Vice Chair Coleman adjourned the Board into its regular Committee meetings at approximately 2:00 p.m.

Secretary to the Board Gail S. Weber announced that Associate Secretary to the Board Christina Hobbs would be leading the Committee on Education, Research, and Extension to the Capitol Suite on the second floor of the Student Center. She also reminded the Regents that a shuttle would pick them up from their hotel at 6:15 p.m. to go to the evening event at the Rialto Theatre.

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CALL TO ORDER

The Board of Regents of the University System of Georgia met again on Wednesday, April 19, 2000 in the Court Salon of the Student Center Ballroom on the campus of Georgia State University. The Chair of the Board, Regent Kenneth W. Cannestra, called the meeting to order at 9:00 a.m. Present on Wednesday, in addition to Chair Cannestra, were Vice Chair J. Tom Coleman, Jr. and Regents Thomas F. Allgood, Sr., Juanita P. Baranco, Connie Cater, Joe Frank Harris, Hilton H. Howell, Jr., George M. D. (John) Hunt III, Edgar L. Jenkins, Charles H. Jones, Donald M. Leebern, Jr., Elridge W. McMillan, Martin W. NeSmith, Glenn S. White, Joel O. Wooten, and James D. Yancey.

INVOCATION

The invocation was given on Wednesday, March 19 by Jerry Edwards, a student at Georgia State University.

ATTENDANCE REPORT

The attendance report was read on Wednesday, March 19, 2000 by Secretary Gail S. Weber, who announced that all Regents were present.

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STUDENT HONOR: LIA POWELL, GEORGIA PERIMETER COLLEGE

Chair Cannestra called upon the Chancellor to make a special presentation.

Chancellor Portch noted that U.S. News and World Report annually recognizes academic honor students around the nation. The Regents had been provided copies of the newspaper. In attendance at this meeting was one of the 20 two-year college All-American academic honorees. Ms. Lia Powell is a Georgia Perimeter College ("GPC") student who was nominated for this honor by Phi Theta Kappa. There were 1,400 applicants nationwide. Ms. Powell has a 4.0 grade point average, and she plans to major in international relations with a concentration in Japanese. She is currently President of the Student Government Association ("SGA") on the Dunwoody campus of GPC. She is also a reading tutor with Hands On Atlanta. She is a student body representative on President Clinton's One America race initiative, and she was the student coordinator for GPC's Martin Luther King, Jr. celebration. Ms. Powell is a graduate of Henderson High School in Chamblee, and she had a prior career as a professional dancer at Disney World, Epcot Center, and a number of other places. Accompanying her at this meeting were Provost Debra McCurdy and Dean of Academic Services Marcia Mittelstadt of the Dunwoody campus of GPC. Chancellor Portch asked them to stand and be recognized. Then, he asked Ms. Powell to approach the podium and tell the Regents about herself.

Ms. Powell greeted the Chancellor and Regents. She expressed gratitude for the education she received at GPC and the support of the students, faculty, and administration. She enrolled at GPC in spring 1998 after a major knee injury ended her dancing career at Disney World. She had graduated from high school ten years earlier, and she was very nervous on her first day of classes at GPC. During her first semester, she became involved in extracurricular activities on campus. She performed in productions such as Waiting for Godot and Tartuffe with the Dunwoody campus Drama Club. Then, she became President of the Drama Club and organized a fund-raiser that helped finance more productions. Next, she became the SGA President. After being inducted into the Phi Theta Kappa honor society, she became Vice President of the Dunwoody campus chapter. When she learned of her selection for the All-American academic team and the trip to Washington D.C., she could not believe it. In the week before this Board meeting, she attended the American Association of Community College's ("AACC") annual convention, where she was recognized for this accomplishment. She has received awards from AACC, Phi Theta Kappa, and U.S.A. Today, all sponsors of the All-American two-year college academic team program. She was honored to receive such distinction and to represent the State of Georgia and GPC. Shortly after flying back to Atlanta, she attended the recognition luncheon for the All-Georgia academic team. She thanked Chancellor Portch for attending the luncheon and delivering the keynote address. Ms. Powell plans to pursue a career in international relations. In closing, Ms. Powell thanked Chancellor Portch, the Board of Regents, and GPC for offering opportunities that have enabled her to pursue her dreams. She also thanked President Jacqueline M. Belcher, Vice President for Student Affairs Myrtle E. B. Dorsey, Dr. McCurdy, Dr. Mittelstadt, and all of the students, faculty, and administration at GPC who have been an influential part of her life.

Chair Cannestra thanked Ms. Powell and remarked that her academic achievements humble the members of the Board.

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SPECIAL PRESENTATION ON GEORGIA STATE UNIVERSITY

Chair Cannestra next introduced President Carl V. Patton, who would be making a special presentation on Georgia State University ("GSU").

President Patton thanked Chair Cannestra and remarked that it was a pleasure to be hosting the Board meeting at GSU. He noted that in the 20 years since the Board last met at GSU, the university has undergone remarkable changes. GSU had post-tenure review before anyone else, and students at GSU have long been involved in setting the mandatory student fees. Most importantly, GSU has transformed into one of the leading urban research universities in the nation. President Patton gave the Regents a pop quiz. The first question was "Which was the only business school in the State ranked in the top ten for return on investment by Forbes magazine?" The answer was GSU. The second question was "Which is the only university in Georgia with an Oscar?" The answer was GSU. The Oscar that Johnny Mercer won in 1961 for Moon River is housed in the Pullen Library research archives. The final question was "Which university biology department has the highest National Institute of Health ('NIH') funding rank?" The answer was, of course, GSU.

President Patton noted that one of the challenges of GSU is perception. However, GSU is one of the largest urban research universities in the country. At GSU, 33,000 students are seeking degrees. Of these, 24,000 enroll each semester. President Patton stated that GSU is now enrolling its highest quality freshmen ever in its history in terms of Scholastic Aptitude Test ("SAT") scores and grade point averages ("GPAs"). Since 1992, entering GPAs have increased from 2.6 to 3.1; average SAT scores have increased from 877 to 1046. Along with the increased quality of incoming students, competition for admission is increasing. GSU is providing the type of environment its students deserve. Most significantly, GSU has strengthened its learning support systems. Last year, GSU began a program called Freshman Learning Communities. This program groups students together in the same core courses so that they study together and form long-lasting friendships. Studies have shown that students who participate in this type of program get better grades, are more likely to graduate, and have a more satisfying college experience. Also last year, a freshman advising center was established to help alleviate stress students face during enrollment periods. A student advocate office was also established to help students learn how to get around in such a large institution.

While GSU has grown in size and scope, it still holds that the students come first, said President Patton. GSU has the most diverse campus in the entire University System. Its students come from every county in Georgia, every state in the nation, and 123 countries around the world. He speculated that there are three main reasons students choose GSU. First is the faculty, who actually teach and like teaching. Secondly, GSU's academic programs prepare students for careers in emerging as well as traditional fields. Third, GSU is located in the center of a booming international city. Regarding the faculty, President Patton noted that today, educators and researchers who are leaders in their fields are seeking out GSU. For example, Dr. Julia K. Hilliard, Professor of Biology, is a world-renowned expert in vaccine studies who is currently working on a vaccine for herpes B. Dr. Ronald Cummings, Professor of Economics, is an influential leader in environmental policy who is helping the State in its current water "wars." Dr. Jorge Martinez, Professor of Economics and Director of International Studies at the Andrew Young School of Policy Studies, is an expert in tax structure whose advice is often sought by governments around the world. Each one of these leading experts is both a great researcher and a great teacher. President Patton next addressed academic programs, reporting that there are 250 programs at GSU, many of which prepare students for careers with high-tech companies or "industries of the mind," such as telecommunications, E-commerce, software development, computer graphics, biotechnology, and biomedicine. Employers in these fields must fill jobs with the best talent. GSU students are in demand because the university offers programs that are directly related to these fields and produces graduates who are prepared to go to work. GSU's NIH funding for biomedical research in the College of Arts and Sciences continues to rank in the top 15% nationwide. The biology research program receives more NIH funding than the programs at heavyweight institutions, including Pennsylvania State University, Syracuse University, and the University of South Carolina. Many students attend GSU for its traditional strengths, such as business. Last year, GSU was honored with a major gift to the business school from J. Mack Robinson. The J. Mack Robinson College of Business continues to receive top national rankings. The newest school is the Andrew Young School of Policy Studies, which is breaking ground in domestic and international economic policy, environmental analysis, and health policy. It even helped Russia revise its tax code through a $20 million contract. So, students come to GSU for the faculty and the programs, but they also come for the unique opportunities that only an urban university can provide. Students who want a competitive edge in the job market will be products of universities like GSU. As a result, GSU's enrollment continues to grow and is expected to increase by 4,000 students in the next seven years. How to provide adequate facilities as the population grows will continue to be one of GSU's major challenges, because increasingly, the student body is comprised of lower-division students who need to take science classes to meet their undergraduate requirements. President Patton reported that there is a science teaching lab deficit of 200,000 square feet. Most of the science teaching labs are located in Kell Hall, which is an old converted parking garage. So, a new science laboratory building to replace Kell Hall is vital to the future of GSU, he said.

In closing, President Patton stated that GSU is trying to meet the needs of its increasingly talented student body, but it could not do so without the Regents' support. He thanked them for approving the new technology fee, which will help GSU remain competitive and will serve the students well. He read a memo that President A. Bartlett Giamatti of Yale University had written on his first day as President in 1978. It proclaimed, "I wish to announce that henceforth, as a matter of university policy, evil is abolished and paradise is restored. I trust all of us to do whatever possible to achieve this policy." President Patton remarked that like President Giamatti, GSU has big intentions. It is not yet paradise, but GSU is working on it. He thanked the Regents and stepped down.

Chair Cannestra thanked President Patton and proceeded to the Committee reports.

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TEACHING HOSPITAL COMMITTEE

The Teaching Hospital Committee met on Tuesday, April 18, 2000 at approximately 9:30 a.m. in the Capitol Suite of the Student Center on the campus of Georgia State University. Committee members in attendance were Chair Thomas F. Allgood, Sr., Vice Chair J. Tom Coleman, Jr., and Regents Joe Frank Harris, Charles H. Jones, Donald M. Leebern, Jr., Elridge W. McMillan, and James D. Yancey. Chair Allgood reported to the full Board on Wednesday that the Committee had reviewed five items, three of which required action. He explained that several agreements in Items 1 though 3 were considered first by the board of directors of MCG Health, Inc. at a meeting on Monday, April 17, 2000. The Teaching Hospital Committee also considered each of these agreements in its meeting and was recommending them for approval to be implemented on July 1, 2000. Chair Allgood thanked all of the parties involved for their work on this project, including the Department of Administrative Services and the State Auditor's Office. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Approval of Associated Agreements Between the Board of Regents and MCG Health, Inc.

Senior Vice Chancellor for Capital Resources Lindsay Desrochers presented Items 1 through 3. She thanked the staff of the Board of Regents and the Medical College of Georgia ("MCG") for their work in developing the agreements. She explained that although the agreements are substantially complete, there will be further modifications, and the Committee was asked to authorize her, in consultation with Chair Allgood, to make such modifications as needed. Dr. Desrochers identified four issues which must be resolved in order to complete the transfer of the operation and management of the MCG hospital and clinics to MCG Health, Inc. ("MCGHI"): 1) resolution of MCGHI concerns about indemnification and insurance; 2) conversion of bonds totaling approximately $55 million, which financed MCG hospital and clinics facilities, to nonprofit 501(c)(3) bonds; 3) an inventory of assets; and 4) offers of employment by MCGHI to MCG hospital and clinics employees. She explained that the seven agreements outlined in Items 1 through 3 essentially constitute the complete transition of MCG to MCGHI.

Background: In January 2000, the Board of Regents approved the Master Affiliation Agreement between the Board of Regents and MCGHI. for the operation and management of the Medical College of Georgia hospital and clinics. The action of the Board of Regents was the culmination of several years of analysis and planning, which determined a strategy for securing the future of Georgia's singular public health sciences university hospital and clinics. The Master Affiliation Agreement was the first of a series of agreements that cover facilities, assets, employees, and other elements involved in the transfer of operation and management effective July 1, 2000. It embodies the fundamental understanding of the parties regarding the affiliation and expresses the interests of the parties in negotiating the terms of the Associated Agreements.

The Associated Agreements spell out in detail the terms of the transfer and the ongoing relationships between MCG and MCGHI and between MCGHI and the MCG Physicians Practice Group. The Associated Agreements include the Master Lease; the Clinical, Educational and Research Services Agreement; the Operations and Services Agreement; the Personnel Agreement; and the Transfer Agreement detailing the assets and liabilities to be transferred.

Summaries of the basic terms of each of these agreements were distributed to the Regents and the public as attachments to the meeting agenda. Those summaries are on file with the Office of Capital Resources. Detailed schedules of assets and liabilities to be transferred were added at the time of the Board meeting, and other conforming or minor modifications may be necessary to complete the documents and accomplish the transfer.

1. Approved: The Board approved the Master Lease and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications of the Master Lease, sub-leases, and the exhibits that list affected facilities as necessary to accomplish the transfer. This agreement provides for MCGHI to occupy and use certain clinical facilities on the MCG campus in order to operate the MCG hospital and clinics. The approval of this agreement includes approval of sub-leases of portions of those facilities back to MCG and approval of leases of portions of other buildings to MCGHI. A copy of this agreement is on file with the Office of Capital Resources.
   
2. Approved: The Board approved the Clinical, Educational and Research Services Agreement and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications to the agreement and attached exhibits and schedules as necessary to accomplish the transfer.
   
   This agreement defines the relationship and responsibilities of MCG and MCGHI in support of the tripartite mission of MCG, which includes teaching, research, and service (patient care). A copy of this agreement is on file with the Office of Capital Resources.
   
3. Approved: The Board approved the Operations and Services Agreement and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications to the agreement and attached exhibits and schedules as necessary to accomplish the transfer.
   
   This agreement defines the services that MCG and MCGHI will exchange and the terms of that exchange to support the mission of MCG and the operation of the MCG hospital and clinics. A copy of this agreement is on file with the Office of Capital Resources.
   
4. Approved: The Board approved the Personnel Agreement and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications to the agreement and attached exhibits and schedules as necessary to accomplish the transfer. This agreement covers various groups of employees at MCG hospital and clinics and their status following the transfer of the hospital and clinics to MCGHI: 1) MCG employees at the MCG hospital and clinics with ten or more years of service accrued under the Teachers Retirement System will have a choice to become MCGHI employees or to remain MCG employees and be leased to MCGHI to continue working in the hospital and clinics. 2) MCG hospital and clinics employees with less than ten years service will be offered equivalent positions with reasonably comparable terms and conditions of employment at MCG Health, Inc. Their positions at MCG will be terminated. 3) MCGHI will also employ new employees, as needed, in addition to former MCG employees. A copy of this agreement is on file with the Office of Capital Resources.
   
5. Approved: The Board approved the Transfer Agreement and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications to the agreement and its exhibits and schedules as necessary to accomplish the transfer.
   
   This agreement provides for the transfer of appropriate assets and liabilities on the books of MCG hospital and clinics on June 30, 2000 to MCGHI. A copy of this agreement is on file with the Office of Capital Resources.

2. Approval of Physicians Practice Group Agreements Between MCG Health, Inc. and the Medical College of Georgia Physicians Practice Group and Between the Medical College of Georgia and the Physicians Practice Group

Background: The Medical College of Georgia ("MCG") Physicians Practice Group ("PPG") is a 501(c)(3) cooperative organization under Board of Regents policies with a long-standing relationship to MCG. PPG provides management services for the practice of medicine by MCG faculty at the MCG hospital and clinics, including billing and collections for faculty physician services. With the transfer of management of MCG hospital and clinics to MCG Health, Inc. ("MCGHI"), a new agreement is needed between MCGHI and PPG and modifications are needed in the Memorandum of Agreement between MCG and PPG.

The Physicians Practice Group Agreement between MCGHI and PPG provides for MCGHI to purchase clinical services of MCG faculty physicians and oral surgeons provided in clinical facilities of MCGHI. PPG acts as the broker of these services for MCG. This agreement is on file with the Office of Capital Resources.

Approved: The Board approved the Physicians Practice Group Agreement and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications to the agreement and attachment schedules as necessary to accomplish the transfer.

The revised Memorandum of Agreement Between MCG and PPG provides for PPG to enter into agreements with MCGHI and other healthcare organizations on behalf of MCG faculty physicians to increase and enhance opportunities for MCG faculty physicians to maintain their skills through the practice of medicine and for MCG students to receive medical training. This agreement is on file with the Office of Capital Resources.

Approved: The Board approved the Revised Memorandum of Agreement Between MCG and PPG and authorized the Senior Vice Chancellor for Capital Resources and President Francis J. Tedesco of MCG, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor modifications of the agreement as necessary.

3. Approval of Amendments to the Master Affiliation Agreement Between the Board of Regents and MCG Health, Inc.

Background: The Master Affiliation Agreement approved in January 2000 by the Board of Regents and the Board of MCG Health, Inc. ("MCGHI") anticipated the execution of multiple Associated Agreements, as noted in Item 1 above, and provided for amendments to the Master Affiliation Agreement with the consent of both parties. Subsequent negotiations on the various Associated Agreements have further refined the details of the relationship between the parties. Although the Associated Agreements are entirely in keeping with the intent expressed in the Master Affiliation Agreements, some inconsistencies exist which require resolution by amendment of the Master Affiliation Agreement.

In addition, an amendment to the Master Affiliation Agreement was necessary to modify the composition of the Board of MCGHI.

Approved: The Board of Regents approved the recommended amendments to the Master Affiliation Agreement, which were associated with the composition of the MCGHI board of directors, and authorized the Senior Vice Chancellor for Capital Resources, in consultation with the Chair of the Teaching Hospital Committee, to approve conforming or minor amendments with the other approved Associated Agreements. This agreement is on file with the Office of Capital Resources.

4. Information Item: Update From President Francis J. Tedesco on the Medical College of Georgia Early Retirement Plan

President Tedesco reported to the Committee that since January 28, 2000, 128 Medical College of Georgia ("MCG") employees have retired under the early retirement plan; 718 are eligible to retire, and another 13 may become eligible by buying back creditable service time. Two eligible employees have died, and another lost eligibility due to a period of leave without pay. MCG is tightly restricting rehires of retired employees because of strenuous objections by members of the General Assembly. A limited number of rehires will be considered on a case-by-case basis beginning January 1, 2001. Only 40% of the funds saved by early retirements will be available for replacement of employees. The balance will be used to support the cost of the retirement plan, and the remainder may be reallocated to departments to fill additional positions. President Tedesco reported that Mr. Don Snell, MCG Health, Inc. President and Chief Executive Officer, expects to fill very few vacancies at the hospital, far less than 40%. President Tedesco commented that although the early retirement plan had become a controversial issue, it had been a very good and necessary solution for the financial problems of the hospital and clinics.

President Tedesco noted that the cost of the plan's implementation had exceeded the projections of William M. Mercer, Inc., because some cost factors were overlooked or misjudged. Nonetheless, the plan is expected to achieve $8.8 million in annual savings. In fact, the savings may surpass original expectations and significantly reduce or possibly eliminate the existing deficit.

Background: In August 1999, the Board of Regents approved an early retirement program for MCG employees who meet certain eligibility criteria. The principle goal of the program was to reduce costs and achieve savings in the MCG hospital and clinics. An early retirement monitoring committee has been established to monitor the savings from these early retirements and to oversee the necessary filling of vacancies that result. Retirements have been scheduled between February 1, 2000 and June 30, 2001 to ensure the continued effective operation of the college and the hospital and clinics through the transition.

5. Information Item: Report From Senior Vice Chancellor for Capital Resources Lindsay Desrochers on Early Retirement Investment Advisory Committee and Policies

Dr. Desrochers reported to the Committee that an investment advisory committee has been established, chaired by Assistant Vice Chancellor for Internal Audit Ronald B. Stark, to advise her and President Francis J. Tedesco on investments of the early retirement plan funds of the Medical College of Georgia ("MCG"). Also on the committee are Dr. J. Michael Ash, Senior Vice President for Fiscal Affairs and Planning for MCG; Mr. Curt M. Steinhart, President and Chief Executive Officer of Physicians Practice Group; and Mr. Don Snell, President and Chief Executive Officer of MCG Health, Inc. The committee will also include a representative from the business community. Wells Fargo has been selected as the custodian of the funds, and the Committee is exploring investment management alternatives. The staff will monitor the funding of the early retirement program carefully in order to ensure that the fund investment is sufficient to meet obligations.

Background: The early retirement plan at MCG will be financed with savings from vacant positions of retirees in the plan. An investment advisory committee has been established to advise Senior Vice Chancellor for Capital Resources Lindsay Desrochers and MCG President Francis J. Tedesco on the development of an investment policy, the initial allocation of fund assets, the selection of an investment manager, and fund performance. As the early retirement program is underway, steps have been taken to implement this activity.

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AUDIT COMMITTEE

The Audit Committee met on Tuesday, April 18, 2000 at approximately 3:05 p.m. in the Court Salon of the Student Center Ballroom on the campus of Georgia State University. Committee members in attendance were Chair Hilton H. Howell, Jr., Vice Chair George M. D. (John) Hunt III, and Regents Connie Cater, Glenn S. White, and Joel O. Wooten. Deputy Director Larry Whitaker represented the Department of Audits and Accounts during this meeting. Chair Howell reported to the full Board on Wednesday that the Committee had reviewed two items, neither of which required action. Those items were as follows:

1. Information Item: Year-to-Date Review of State Department of Audits Reports

Assistant Vice Chancellor for Internal Audit Ronald B. Stark presented and summarized the State Department of Audits financial reports of System institutions. He noted that because of the time line of this audit process, any significant audit finding would take at least two years to show any improvement. In the last year, 15 institutions have improved their State audit rankings, 12 had no significant findings in 1998 nor 1999, and 5 had a drop in rank. Of 58 total audit findings at 34 institutions, 26 were notable, 22 were significant, and 10 were major. Two institutions were ranked Code 5, and two were ranked Code 4. (Code 1 is the highest level ranking, and Code 5 is the lowest.) Mr. Stark noted that Floyd College appointed a new Vice President of Finance and Comptroller in 1998 and has improved from a Code 5 to a Code 1 in four years. Senior Vice Chancellor for Capital Resources Lindsay Desrochers added that Albany State University also has a new staff, has done a great deal of remediation with regard to its previous findings, and has moved up in ranking to a Code 3. President Portia H. Shields is also accommodating an audit by the Board of Regents audit staff. It was also noted that Fort Valley State University is showing improvement.

Committee members asked the staff to develop a procedure to ensure timely follow-up on and corrective action for serious audit findings.

2. Information Item: Year-to-Date Status of Internal Audit Activity

Mr. Stark presented the year-to-date status of all Systemwide internal audit activity as of December 31, 1999. He explained that the Board of Regents staff and all institutions, except one, will substantially complete the fiscal year 2000 approved audit plan. A summary of the internal audit findings will be reviewed at the first Audit Committee meeting of fiscal year 2001.

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COMMITTEE ON FINANCE AND BUSINESS OPERATIONS

The Committee on Finance and Business Operations met on Tuesday, April 18, 2000 at approximately 2:10 p.m. in the Court Salon of the Student Center Ballroom on the campus of Georgia State University. Committee members in attendance were Chair Glenn S. White, Vice Chair Hilton H. Howell, Jr., and Regents Connie Cater, George M. D. (John) Hunt III, Charles H. Jones, Donald M. Leebern, Jr., and James D. Yancey. Chair White reported to the Board on Wednesday that the Committee had reviewed five items, all of which required action. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Approval of Fiscal Year 2001 Budget Allocations

Approved: The Board approved the allocation of State appropriations for fiscal year 2001 among the various institutions and operating units of the University System of Georgia.

This item was discussed in full by the Committee on Finance and Business Operations as a Committee of the Whole. (See pages 2 to 8.)

Fiscal year 2001 represents a transitional year for the University System of Georgia as the System's student enrollments adjust to the change to the semester system. While enrollments in the first semester year (1998-1999) affect formula appropriations this year, the University System of Georgia benefits from the Governor and General Assembly's foresight to maintain funds in the budget to meet current enrollment demand. The combination of additional funds to hold harmless some of the enrollment formula loss, the addition of funds for new formula costs, the use of current year reserved revenues, and the anticipated support for funds equal to this year's reduction in the fiscal year 2001 amended budget, will significantly ease the transition.

The general fund and lottery fund budget for current University System of Georgia operations is $1.629 billion, a $21.1 million, or 1.3%, increase over fiscal year 2000 appropriations. There are two significant additions to the Board of Regents budget which result in a total State general fund and lottery fund budget for the University System of $1.717 billion, representing a $109.2 million, or a 6.8%, increase over last year's budget. These additions include funding for the development of a new student information and accountability system under the auspices of the State Data & Research Center housed at the Georgia Institute of Technology ($55 million) and for the management of the State public library system ($33.1 million). Neither of these are actual additions to the basic instructional operations budget of the University System of Georgia.

University System teaching institutions are recommended to receive a total State appropriation allocation of $1.43 billion, which includes $61.2 million in new and continuing allocations for special funding initiatives.

Other organized activities ("B" unit and non-teaching "A" activities), including activities such as the Georgia Tech Research Institute, the Medical College of Georgia hospital and clinics, the Agricultural Experiment Station, Cooperative Extension Service, the Board of Regents Central Office, and now the State Data & Research Center and public library system, are recommended to receive $256.5 million in State appropriations, an increase of $77.7 million above current funding levels. Lottery funds comprise a total $31.9 million in System resources for fiscal year 2001. As a change from prior year practice, lottery funds for the Equipment, Technology and Construction Trust Fund ("ETACT") were included in the fiscal year 2000 amended budget appropriations at the level of $15 million. Institutions will be required to expend these funds in the current fiscal year but have through the end of fiscal year 2001 to obtain matching private funding. Major provisions of the State appropriation budget approved by the Governor and General Assembly for the University System of Georgia are as follows:

• $37.2 million for a 3% merit-based salary increase for faculty and staff. Salary increases for contract faculty become effective for the fall semester, while increases for all other employees become effective October 1, 2000.
• An overall tuition increase of 3.8% was recommended (Item 2 below), which is projected to raise an additional $20.9 million in tuition revenues in fiscal year 2001, increasing total tuition revenue from $430.4 million to $451.3 million. These added tuition revenues will help institutions fund new costs in accordance with the budget recommendations of the Governor and General Assembly.
• $103.9 million reduction in formula funding based on 1999 enrollments which is offset by a $47.4 million addition to assist University System institutions in meeting recent enrollment increases. Enrollments have rebounded at most institutions, although equivalent full time("EFT") enrollments have not yet recovered to pre-semester conversion levels.
• To help institutions further meet enrollment demand in fiscal year 2001, a $24 million (maximum) reduction program was initiated in fiscal year 2000 with the intent of reserving these funds for use in fiscal year 2001. The Governor has agreed to seek up to a $24 million match in the fiscal year 2001 amended budget, which together with the $24 million reserved substantially restores funding for the University System of Georgia to fiscal year 2000 levels. This is a one-time-only adjustment to State appropriations. Appendix 1C to the Committee agenda shows the impact of these additional funds on institutional budgets and allocations. The agenda is on file with the Board of Regents Central Office.
• $35.6 million for new formula-related costs, including health insurance premiums ($19 million), new facilities costs ($3.4 million), increases for major repair and rehabilitation ("MRR") funding ($1.6 million), and other salary and fringe benefit costs ($11.6 million). MRR funding for fiscal year 2001 will total $52.1 million, maintaining the current percentage of total building replacement cost at approximately 1%.

Within the total $61.2 million approved for special funding initiatives, the Governor and General Assembly approved $17.6 million for new initiatives reflecting the Board of Regents' strategic objectives and budget for fiscal year 2001 as well as major State-level priorities. These include the following:

• $1.46 million for the Georgia Global Learning Online for Business and Education ("Georgia GLOBE") initiative to initiate the E-Core program (a set of Web-based courses that satisfy the requirements for the University System's core curriculum at the freshman and sophomore levels), to implement the full-service Web portal for enrolled students, and to begin to develop and deliver junior- and senior-level courses and programs of strategic importance to the State's economy.
• $3.5 million for the Georgia Eminent Scholars Program. This provides funding for seven eminent scholars at Georgia Southern University, Gainesville College, Georgia College & State University, North Georgia College & State University, Georgia State University, Macon State College, and Georgia Southwestern State University.
• $2.64 million to invest in excellence at Georgia's historically black universities. These funds will enable Fort Valley State University to meet its federal fund matching requirement as a land grant institution and will allow Savannah State University, Albany State University, and Fort Valley State University to create new or improve existing academic programs to achieve national recognition, to enhance current technological infrastructures, and to attract and retain high-quality students.
• $8.6 million for the Yamacraw Mission to continue the partnership among government, academia, and the private sector to attract to Georgia multi-national electronic companies that specialize in the design of world-leading electronics products in targeted market segments, such as mobile communications. Eligible institutions in the University System will participate in this project through a competitive project grant process.
• The Governor and General Assembly provided funds in the amount of $1.05 million for an Intellectual Capital Partnership Program ("ICAPP") rural region pilot project at East Georgia College and a rural educational development program at Georgia Southern University. Additional ICAPP initiatives proposed for fiscal year 2001, such as the JumpStart program, will be eligible for support from the One Georgia Project Fund.
• $375,000 for the Hispanic program initiative. These funds will allow for the expansion of English as a second language programs, the creation of outreach programs targeted to Hispanic populations, and cultural/language training programs for University System personnel.

Allocation Consultation and Principles
The senior leadership group in the Chancellor's Office held campus budget conferences during the month of January with each institutional president and senior staff via Georgia Statewide Academic and Medical System ("GSAMS") video. Consultation also took place with Board of Regents Chair and Committee on Finance and Business Operations Chair. The purpose of these meetings was to share information concerning the Governor's budget recommendations, particularly as they concerned formula funding and to discuss System-level priorities for funding in fiscal year 2001. With the understanding that new formula funds would not be available in fiscal year 2001, the meetings centered on a few key institutional budget priorities; institutional enrollment trends; specific campus needs, such as new facilities maintenance; and fringe benefits and institutional plans for supporting auxiliary funded programs and mandatory student fees, with special emphasis on plans for implementing new technology fees.

During the last two budget cycles, allocation recommendations have been based on a set of principles as follows:

• Institutional enrollment related to enrollment targets, formula-generated credit hours and given this transitional year, enrollment trends for recent years are essential factors in the allocations (50% of the proposed budget allocation is based upon the enrollment trends for the last three years, 50% is based on share of total budget).
• Institutional expenditures per EFT student is considered with the objective of maintaining a reasonable range among institutions within a given sector.
• Allocations are made to reinforce institutional missions and strategic initiatives.
• New State dollars, where available, are allocated to institutions to upgrade program quality and support the Board of Regents' strategic initiatives.
• Funds for specific new formula costs, such as health insurance, new facilities, and other fringe benefit needs, are allocated according to estimated need.

2. Approval of Fiscal Year 2001 Tuition And Non-Resident Fees

Approved: The Board approved the tuition rates for fiscal year 2001 to become effective in the fall semester 2000. The tuition rates for fiscal year 2001 are on file with the Office of Capital Resources. This item was discussed in full by the Committee on Finance and Business Operations as a Committee of the Whole. (See pages 2 to 8.)

Background:
Undergraduate and Graduate Tuition
Proposed undergraduate resident tuition rates are set at a rate 3.8% above current tuition rates. This increase represents the amount required to meet new costs associated with a 3% merit salary increase Systemwide and to meet formula-related costs as expected in the Governor's budget. Graduate tuition rates, excluding certain professional graduate programs, are established at a rate 20% above undergraduate rates and out-of-state rates (matriculation and non-resident fees combined are four times in-state tuition rates). These adjustments are determined according to Board policy.

Professional Program Tuition
Board policy authorizes institutions to request separate tuition rate adjustments for select professional programs. The purpose is to provide additional funds for program improvement while allowing programs to remain competitive with peer programs in public colleges and universities in other states. Programs included in this category are the master of science in management program at the Georgia Institute of Technology; the University of Georgia's law, pharmacy, and veterinary medicine programs; Georgia State University's nursing and master of business administration programs; and the Medical College of Georgia's medical and dental programs. The Medical College of Georgia proposed a multi-year adjustment of its medical program tuition until in-state tuition reaches the mean of its comparator medical schools. This proposal and increases for other professional programs are supported in the tuition recommendations which appear in Appendix B to the Committee agenda, which is on file with the Office of Capital Resources.

3. Approval of Fiscal Year 2001 Mandatory Student Fees

Approved: That the Board approved increases and/or adjustments in mandatory student fees for various institutions of the University System of Georgia. Fiscal year 2001 mandatory student fees are on file with the Office of Capital Resources.

This item was discussed in full by the Committee on Finance and Business Operations as a Committee of the Whole. (See pages 2 to 8.)

Background: To support its fee requests, each University System institution is required to submit financial statements and supporting justification for any proposed increase. The fee review process carefully considers only those requests that meet the minimum submission criteria, document fully all costs and revenues, and comply with business plan objectives.

In the past few years, institutions have submitted numerous requests to establish technology fees. The requests have been held during a two-year pilot program of technology fees. An agreement has now been made with the Governor and the Georgia Student Finance Commission that technology fees up to $75 per semester at the University System research universities and up to $38 per semester at all other University System institutions will be HOPE Scholarship eligible. Technology fees are recommended with values ranging from a low of $10 per semester at Gordon College to a high of $75 per semester at the University of Georgia. No increases in technology fees are recommended for the six pilot institutions -- the Georgia Institute of Technology, Georgia Southern University, Kennesaw State University, Georgia Perimeter College, Clayton College and State University, and Floyd College -- which received authorization to charge technology fees three years ago.

Additionally, a fee to support renovation and new construction for a student recreation center at the Georgia Institute of Technology ($54 per semester) and a small increase in the university center fee at Georgia State University (from $32 to $34 per semester) are recommended. At its March meeting, the Board endorsed a recommendation to the Georgia Student Finance Commission that current mandatory facilities fees and those facilities fees that had already been requested be eligible for HOPE Scholarship support. No other new facilities fees are recommended.

Only 20 specific requests to increase mandatory student fees were submitted this year (not including technology fee submissions). Because of the addition of technology fees at each University System institution, it was recommended that all other mandatory student fees be held at current rates for fiscal year 2001.

4. Approval of Salary and Wage Administration Policy

Approved: The Board of Regents approved the statement of salary and wage administration, which is as follows:

SALARY AND WAGE ADMINISTRATION POLICY
FISCAL YEAR 2001

The Board of Regents allocated to each institution funds equivalent to a three percent (3%) salary increase for all employees. These increases must be provided on the basis of merit. With these funds, the institutions may grant salary increases to individual employees. It is expected that individual merit salary increases will be reasonably distributed among employees in amounts ranging from zero (0%) to ten (10%) percent. Salary increases may exceed ten (10%) percent for employees exhibiting exceptionally meritorious performance. Salary increases that exceed ten percent must be justified individually in writing when the budget is submitted. (This requirement shall be waived for information technology employees covered by the policy approved by the Board in November 1998.) Salary increases for non-faculty employees and staff shall become effective October 1, 2000 and salary increases for faculty shall become effective with the commencement of fall semester 2000.

This item was discussed in full by the Committee on Finance and Business Operations as a Committee of the Whole. (See pages 2 to 8.)

5. Approval of Policy Guidelines for Seed Capital Fund

Approved: The Board of Regents approved the policy guidelines established by the Advanced Technology Development Center ("ATDC") for the administration of the Seed Capital Fund (the "Fund"), and the Fund will be subject to the investment policy of the Board as contained in the Board of Regents Policy Manual Section 705.02. The policy guidelines and the investment policy are on file with the Office of Capital Resources.

Further, the ATDC, through the president of Georgia Institute of Technology, must submit an annual report on the investment activities, including companies and other sources chosen for investment and outcomes of these investments, at the end of each fiscal year.

This item was presented by Dr. Daniel S. Papp, Director of Yamacraw Educational Programs. The policy guidelines for the Fund are as follows:

BOARD OF REGENTS POLICIES
REGARDING THE ATDC SEED CAPITAL FUND

Legislative Action
During the 2000 session of the Legislature of the State of Georgia, the Legislature amended Chapter 10 of Title 10 of the Official Code of Georgia annotated, relating to the Seed Capital Fund.

The amended legislation created a Seed Capital Fund to provide equity risk capital to support the growth of early-stage companies engaged in next generation technology. The initial allocation of funds, totaling $5 million, is to be used to support Yamacraw efforts in high bandwidth communications, semiconductor technology, and content processing.

The amended legislation also defined terms, authorized the investing of seed capital funds with investment entities, repealed conflicting legislation, and authorized the publication of an annual report pertaining to the Seed Capital Fund.

The legislation created the Seed Capital Fund to be managed by the Advanced Technology Development Center (ATDC), under the authority of the Board of Regents and subject to the policies of the Board of Regents.

This document creates those policies.

Board of Regents Delegation of Authority to ATDC

In keeping with this legislation, the Board of Regents authorizes the ATDC as its designee to undertake actions detailed in the legislation, subject to the policies below.

Board of Regents Policies
The Board of Regents has established the following policies to govern the Fund:

1. The ATDC will use the Seed Capital Fund to develop early stage opportunities in targeted areas. The funds typically will:
   
   

   Be matched at least 3-to-1 by private sector capital on a deal-by-deal basis;
   
   Follow an active/passive model of investing, that is, ATDC will actively pursue opportunities in targeted areas but passively manage the investment;
   
   Purchase a maximum of 49% ownership in a company;
   
   Provide no more than $500,000 in the seed round of financing; and
   
   Be provided only after positive findings are obtained in a rigorous investment evaluation process.

2. The ATDC will develop a detailed investment evaluation process that will include three stages. These stages shall be based on:
   
   

   Review and discovery, during which promising opportunities shall be identified, explored, and either accepted on a preliminary basis or rejected;

   Review and packaging preliminary opportunities, during which opportunities are further examined and analyzed, discussed with a Seed Fund Board of Advisors, and either packaged for the purpose of soliciting formal commitments from other investors or rejected; and

   Funding and conclusion, during which other investors will be identified, due diligence will be concluded, and contracts will be finalized.

3. Money in the Seed Capital Fund that is not invested in early-stage companies will be invested per current Board of Regents Investment Policy, to which the ATDC is subject.

Reporting Mechanism
The ATDC will publish an annual report on the Seed Capital Fund, which shall be made available to the Governor, the Legislature, and the Board of Regents. The annual report shall also be made widely available by ATDC to innovative enterprises of special importance to the Georgia economy.

The annual report will set forth in detail all operations and transactions conducted by the ATDC in regards to the Seed Capital Fund. The annual report shall specifically account for the ways in which the need, mission, and programs of the ATDC described in the legislation have been carried out.

Background: The Seed Capital Fund was created by the State of Georgia to provide equity and other risk capital to support start-up of companies engaged in next generation technology, including but not limited to the Yamacraw Mission. The Board of Regents, through the ATDC, is empowered to administer the fund and to establish the policies by which monies in the fund may be invested, reinvested, and disbursed. By statute, each individual capital contribution must be matched 3 to 1 by private sector funds, no more than $500,000 in State funds can be provided for any investment, and ownership of any company is limited to a maximum of 49%. A rigorous evaluation process of each company is required wherein each company must submit a pro forma business plan, provide a statement on the amount, timing, and projected use of capital, and describe the potential economic impact. The legislation also requires that the ATDC publish an annual report to be made available to the Governor, the General Assembly, and the Board of Regents on the progress and successes of the program.

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COMMITTEE ON REAL ESTATE AND FACILITIES

The Committee on Real Estate and Facilities met on Tuesday, April 18, 2000 at approximately 2:30 p.m. in the Court Salon of the Student Center Ballroom at Georgia State University. Committee members in attendance were Chair Charles H. Jones, Vice Chair Donald M. Leebern, Jr., and Regents Connie Cater, Hilton H. Howell, Jr., George M. D. (John) Hunt III, Glenn S. White, and James D. Yancey. Chair Jones reported to the Board on Wednesday that the Committee had reviewed six items, five of which required action. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Facilities Naming, Sustainable Education Building, Georgia Institute of Technology

Approved: The Board approved the naming of the Sustainable Education Building ("SEB") at the Georgia Institute of Technology ("GIT") the "Lamar Allen Sustainable Education Building" in memory of O. Lamar Allen.

President G. Wayne Clough presented this item to the Committee. The SEB is a three-story, 30,000 square-foot building approved by the Board in July 1997 for the School of Civil & Environmental Engineering.

Mr. Allen was the visionary who conceived the idea of the SEB to educate future engineers who better understand the relationship between economic development, technology, and the environment.

Biography of the life and contributions of O. Lamar Allen:

• He was originally from Fayetteville, North Carolina, where his father was stationed in the U. S. Army.
• Mr. Allen was an Atlanta real estate developer and investment banker.
• Though he was a graduate of the University of South Carolina with a bachelor's degree in business administration, Mr. Allen's loyalty and support was with GIT.
• Mr. Allen had the vision of creating a building at GIT where the areas of environmentally conscious design could come together with manufacturing and sustainable technologies.
• Mr. Allen's business leadership helped pull together the consortium of donors to fund the SEB. Much of the building material for the $4 million facility was donated by industry, with donors pledging to supply and use the latest sustainable technology in the SEB's classrooms and research labs.
• Mr. Allen died at the age of 49 together with his 16-year-old son, Ashton Lamar Allen, in the explosion of TWA Flight 800 off Long Island, New York on July 17, 1996.

2. Facilities Naming, MRDC II, Georgia Institute of Technology

Approved: The Board approved the naming of the second building of the Manufacturing Related Disciplines Complex ("MRDC2") at the Georgia Institute of Technology ("GIT") the "J. Erskine Love, Jr. Manufacturing Building" in memory of J. Erskine Love, Jr.

President G. Wayne Clough presented this item to the Committee. The MRDC2 is a 150,000-gross square-foot building valued at approximately $26 million.

Biography of the life and contributions of J. Erskine Love, Jr.:

• Mr. Love was born in Gastonia, North Carolina.
• Mr. Love received his bachelor's degree in mechanical engineering from GIT in 1949 and remained a lifelong financial supporter of the institute.
• In 1956, he founded Printpack, Inc., a manufacturer of flexible packaging material for food processing companies. Printpack, Inc. has grown to be one of the largest companies in the industry.
• Mr. Love had a long record of service to GIT, including serving as a trustee of the Alumni Association, directing the Annual Roll Call campaign in 1967 and 1968, and helping to found the Thousand Club. In 1972, Mr. Love became a trustee of the Georgia Tech Foundation and served as its president from 1981 to 1983.
• At the time of his death (1987), Mr. Love was chairman of the Centennial Campaign, which raised more than $200 million for GIT.
• Honors, Awards or Recognitions:
  • The ANAK Outstanding Young Alumnus Award in 1963.
  • The Alumni Distinguished Service Award, the institute's highest alumni honor.
  • Entrepreneur of the Year by Business Atlanta in 1985.
  • GIT's Engineering Hall of Fame, posthumously in 1994.
  • A wide number of directorships on corporate boards.

The Love family has continued his ties with GIT since Mr. Love's death, with his widow, Mrs. Gay Love, serving as an honorary chair of the Class of 1949 Reunion Committee. To name the facility the J. Erskine Love, Jr. Manufacturing Building is recognition of Mr. Love's leadership at GIT and a commitment to GIT by the Love family.

3. Rental Agreement, Atlantic Investors, Armstrong Atlantic State University

Approved: The Board authorized the execution of an Addendum to Rental Agreement between Atlantic Investors, Ltd. - Series V, Landlord, and the Board of Regents of the University System of Georgia, Tenant, covering 48 apartment-type residential units for the period July 1, 2000 through June 30, 2001 at a monthly rental of $23,452.60 ($281,029.72 per year/$5,863.15 per unit per year) for the use of Armstrong Atlantic State University ("AASU").

The terms of this Addendum to Rental Agreement are subject to review and legal approval of the Office of the Attorney General.

Background: In March 1998, the Board approved the investigation and development of a concept to construct a privatized student housing complex at AASU. This privately funded, constructed, and operated facility on campus will house targeted groups of students who comprise under 5% of AASU students; the draft request for proposal is under review by the Office of the Attorney General and will be ready to send to developers in summer 2000. The earliest potential construction completion date would be spring 2002.

AASU requested Board approval on the continued rental of 48 apartment-type residential units for use by its students.

The rental rate for the renewal period is a 5% increase over the current monthly rental.

The facilities house approximately 175 students (fall occupancy). These students are primarily intercollegiate athletic students, health science students, international students, and students in the 13 county service area who are not within commuting distance. Students will be charged $1,272 for double occupancy and $1,622 for single occupancy per semester.

4. Rental Agreement, 305 Fifth Avenue, Quantico, Virginia, Georgia Institute of Technology

Approved: The Board authorized the execution of a rental agreement between Humston and Associates, Landlord, and Board of Regents, Tenant, covering 5,100 square feet of office space known as 305 Fifth Avenue, Quantico, Virginia for the period beginning May, 2000 and ending June 30, 2001 at a monthly rental of $7,012.50 ($84,150 per year/$16.50 per square foot per year) with option to renew for five consecutive one year periods, with the rent increasing 3% for each option exercised for use by Georgia Tech Research Institute.

The terms of this rental agreement are subject to review and legal approval of the Office of the Attorney General.

This facility will be used to house research activities supporting the U.S. Marine Corps in Quantico, Virginia, including the Realistic Operational Communication Scenarios capability developed by Georgia Tech Research Institute.

Rent and operating expenses (utilities and janitorial services are estimated to be $34,332 per year) are fully funded by the grants underwriting this facility and program.

5.Rental Agreement, 859 Spring Street and 866 West Peachtree Street, Atlanta, Georgia, Georgia Institute of Technology

Approved: The Board authorized the execution of a rental agreement covering approximately 44,209 square feet of office space known as the Haverty Building, 859 Spring Street and 866 West Peachtree Street, Atlanta, Georgia for the period beginning July 1, 2000 and ending June 30, 2001 at a monthly rental of $44,209 ($530,508 per year/$12.00 per square foot per year) with the option to renew for five consecutive one-year periods, with the rent increasing 3.1% for each option exercised for the use of Georgia Institute of Technology ("GIT").

The terms of this rental agreement are subject to review and legal approval of the Office of the Attorney General.

These buildings will be used for the Center for Education in Science Mathematics and Computing ("CEISMC"), Electronic Commerce Resource Center ("ECRC"), ATDC incubator companies, and possible other units.

CEISMC and ECRC are currently located at 500 Tech Parkway. This rental agreement will permit use of 500 Tech Parkway by the Logistics Institute and Industrial and Systems Engineering.

ATDC incubator companies are currently located in GCATT. This rental agreement will permit use of this space in GCATT for the Yamacraw Mission.

Operating expenses, including utilities, janitorial and taxes, are estimated to be $288,239 per year.

6. Information Item: Proposed Fifth Street Development, Georgia Institute of Technology

This was a walk-on item to be added to the agenda of the Committee on Real Estate and Facilities. The addition of this item to the agenda required unanimous consent of the Committee members, and all Committee members present voted to add the item to the agenda.

President G. Wayne Clough of the Georgia Institute of Technology ("GIT") presented this item to the Committee. He explained that before the 1996 Olympics, the Georgia Tech Foundation bought approximately four blocks of property on Fifth Street, from I-75/I-85 to the Biltmore Hotel. Since then, the area has improved, more Atlantans are moving into Midtown, and the old Biltmore Hotel has been renovated for businesses. President Clough stated that at this time, GIT is considering developing a complex on the property, including a continuing education center, a facility to house the Dupree College of Management, a bookstore and other retail outlets, a large parking deck, and, in cooperation with private industry, a hotel. This project will not only provide more facilities space, but will also eliminate the need for some expensive leased facilities. No State funds will be requested to fund the complex, because GIT plans to raise private funds. The anticipated total project cost, not including the hotel, is approximately $100 million. GIT has contracted with a consulting and design architect firm to help develop this project, and President Clough will report back to the Board in August 2000 with an update on the project.

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COMMITTEE ON EDUCATION, RESEARCH, AND EXTENSION

The Committee on Education, Research, and Extension met on Tuesday, April 18, 2000 at approximately 2:10 p.m. in the Capitol Suite of the Student Center on the campus of Georgia State University. Committee members in attendance were Chair Juanita P. Baranco, Vice Chair Elridge W. McMillan, and Regents Thomas F. Allgood, Sr., Joe Frank Harris, Edgar L. Jenkins, Martin W. NeSmith, and Joel O. Wooten. Chair Baranco reported to the Board that the Committee had reviewed 22 items, 18 of which required action. Additionally, 115 regular faculty appointments were reviewed and recommended for approval. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Revisions to the Policy Manual: Tenure

Approved: The Board approved the request of the Office of Academic Affairs to revise the following Policy Manual Sections: Section 803.09 (D) Tenure and Section 803.09 (F-G) Tenure, effective April 19, 2000.

Abstract: In an effort to make Board of Regents policies on tenure more consistent with the Family Medical Leave Act and to enhance the family-friendly work environment, the following changes to the Board of Regents Policy Manual were approved:

Section 803.09 (D) of The Policy Manual of the Board of Regents

Tenure may be awarded, upon recommendation by the President and approval by the Board of Regents, upon completion of a probationary period of at least five years of full-time service at the rank of assistant professor or higher. The five-year period must be continuous except that a maximum of two years interruption because of a leave of absence or part-time service may be permitted, provided, however, that no probationary credit for the period of an interruption shall be allowed that an award of credit for the probationary period of an interruption shall be at the discretion of the President. In all cases in which a leave of absence, approved by the President, is based on birth or adoption of a child, or serious disability or prolonged illness of the employee or immediate family member, the five-year probationary period may be suspended during the leave of absence. A maximum of three years' credit toward the minimum probationary period may be allowed for service in tenure track positions at other institutions or for full-time service at the rank of instructor or lecturer at the same institution. Such credit for prior service shall be defined in writing by the President and approved by the Board of Regents at the time of the initial appointment at the rank of assistant professor or higher.

Implementation: A request for action on the probationary period (either for continuing or stopping the tenure clock) shall be initiated in writing by the faculty member requesting leave and shall be submitted via appropriate administrative officer(s) to the president, who will approve or deny the request. The request from the faculty member shall acknowledge that any increased time for the probationary period will not imply the award of tenure or a favorable review. More than one request for suspension may be granted, but the total time granted for suspensions of the tenure clock for the preceding reasons shall not ordinarily exceed two years. Each institution shall develop and disseminate procedures for reviewing and responding to such requests. At the time of approval of the leave of absence, the president shall designate, and formally inform Board staff, whether the date for tenure review by the Board of Regents (which takes place only once a year) will remain the same or be delayed, with delays approved in increments of a year (up to a maximum of two years).

Sections 803.09 (F-G) of The Policy Manual of the Board of Regents

Except for the approved suspension of the probationary period due to a leave of absence, the maximum time that may be served at the rank of assistant professor or above without the award of tenure shall be seven years, provided, however, that a terminal contract for an eighth year may be proffered if a recommendation for tenure is not approved by the Board of Regents. The maximum time that may be served in combination of full-time instructional appointments (instructor or professorial ranks) without the award of tenure shall be 10 years, provided, however, that a terminal contract for the 11th year may be proffered if a recommendation for tenure is not approved by the Board of Regents.

Except for the approved suspension of the probationary period due to a leave of absence, the maximum period of time that may be served at the rank of full-time instructor shall be seven years.

Implementation: A request for action on the probationary period (either for continuing or stopping the tenure clock) shall be initiated in writing by the faculty member requesting leave and shall be submitted via appropriate administrative officer(s) to the president, who will approve or deny the request. The request from the faculty member shall acknowledge that any increased time for the probationary period will not imply the award of tenure or a favorable review. More than one request for suspension may be granted, but the total time granted for suspensions of the tenure clock for the preceding reasons shall not ordinarily exceed two years. Each institution shall develop and disseminate procedures for reviewing and responding to such requests. At the time of approval of the leave of absence, the president shall designate, and formally inform Board staff, whether the date for tenure review by the Board of Regents (which takes place only once a year) will remain the same or be delayed, with delays approved in increments of a year (up to a maximum of two years).

2. Establishment of Charter Status for Teacher Preparation Programs in Early Childhood Education and Middle Grades Education, Fort Valley State University

Approved: The Board approved the request of President Oscar L. Prater that Fort Valley State University ("FVSU") be authorized to establish charter teacher preparation programs in early childhood education and middle grades education as allowed in the Regents' Principles and Actions for the Preparation of Educators for the Schools, effective April 19, 2000.

The Regents' 1998 Principles and Actions for the Preparation of Educators for the Schools (the "Principles") provide for the following:

The Board of Regents will consider any proposal for a "Charter" teacher preparation program. Such a program will, in return for achieving specified and higher goals, receive release from many System requirements. The System will also seek to have it released from other agency requirements. It will also receive extra funding for reaching agreed-upon goals.

The option for a charter program was included in the Principles to establish an avenue through which institutions could experiment and try whole new approaches to the preparation of teachers so long as the outcomes were higher than those specified in the policy. In keeping with this spirit, no rules and regulations were established for charter programs. Rather, an institution may apply for charter status by proposing a unique program design and ensuring that graduates will exceed expectations included in the Board's policy.

This proposal for charter programs was the first to be received. FVSU proposed a unique program design, and the institution has stipulated that all teachers prepared will exceed the outcomes stated in the Principles and that their pass rate of first-time test takers on PRAXIS II, required for teacher certification, will grow from 40% to 75% (Systemwide 1999 pass rates ranged from 40% to 94%). A description of the charter programs and a list of requested waivers from Regents' requirements follow.

Abstract: FVSU proposed the creation of charter teacher preparation programs in early childhood education and middle grades education to replace current programs in these fields. FVSU also intends to move other teacher preparation programs to the charter model in the future. The charter programs will be "housed" within three administrative units under the joint leadership of the deans of arts and sciences, education, and agriculture. (See Request for Waiver Section.)

The charter programs will require student mastery of an absolute set of high standards to at least the proficient level in order to earn credit for each course. The standards make explicit what teacher candidates must know, be able to do, and accomplish in order to complete course requirements and to be recommended for teacher certification. The standards represent high expectations and are not minimal. The standards serve as the organizing element for teaching, learning, supplemental assistance, and assessment.

Organizing a program around standards changes teaching and learning in several fundamental ways. The standards are held constant for all students. Students must reach the standards to either the proficient or advanced level in order to receive credit for a course.

The amount of time it takes each student to reach at least the proficient level on the standards will vary from student to student. (See Request for Waiver Section.) Some students will need to pay tuition and re-enroll for the same course in order to reach the proficient level on the standards. Others will just need a small amount of supplemental instruction in small groups or through short intercessions scheduled throughout the year. (See Request for Waiver Section.)

The faculty who are teaching in the charter programs have committed to gear all instruction in each course toward helping all students reach the standards to either the proficient or advanced level and to offer short courses or hold extra sessions as necessary to provide students with opportunities to move through the program in a reasonable amount of time without compromising standards of achievement.

At the end of a semester, students will earn one of the following grades:

• A = student has met all standards in this course to the advanced level
• B = student has met all standards in this course to the proficient level
• IC (Incomplete in Charter Program) = student is partially proficient on the standards but needsadditional instruction to become proficient (estimate: 4 weeks or less) (See Request forWaiver Section.)
• IPC (In Progress in Charter Program) = student is not yet proficient on the standards and mustpay tuition and re-enroll in the course (See Request for Waiver Section.)
• F = student has taken the course a second time and has still not yet reached the standards to the proficient level or students put forth insufficient effort in the course the first time

Like other System institutions that prepare teachers, until now FVSU has offered fairly traditional programs. The faculty has concluded that a traditional approach to preparing teachers is not effective for the students served by FVSU. They noted that last year, only 40% of their students aspiring to become teachers passed PRAXIS II, the examination in the teaching field required for teacher certification. The faculty and administration concluded they must 1) restructure their programs to ensure that all teacher candidates reach high absolute standards and 2) allow students additional time and provide them with extra help, if needed, to reach the high standards required for program completion.

These charter programs are unique. While the design of organizing programs by a set of absolute standards has been tested with positive results in K-12 education, it has been tried much less extensively in higher education. The faculty will continue to refine the model over time to make it work. FVSU has agreed to hold itself accountable for the outcomes that follow.

Outcomes: For students who complete the charter programs, starting with the freshman class of fall 2000:

75% pass rate of first-time test takers on PRAXIS II (three out of four students completing all courses in the program will meet certification requirements, up from two out of five)

FVSU will "guarantee" that its graduates exceed the outcomes of the Principles. Students who complete the programs:

• Will be proficient in bringing students from diverse groups to high levels of learning.
• Will have earned a grade of B or better in all core courses and courses in the major or concentrations to ensure they have sufficient subject matter knowledge in all areas included on their teaching certificates.
• Will be proficient in using telecommunication and information technologies as tools for learning.
• Will be proficient in managing a classroom effectively.
• (In early childhood programs) will be proficient in diagnosing difficulties in reading and mathematics and helping students show improvement.
• Students will pass an overall assessment conducted by a review board of faculty and public school teachers and administrators.

The institution will likewise "guarantee" the development of a model that works for preparing minority teachers for the schools.

Need: Children from all ethnic groups would benefit from having increased numbers of minority teachers as role models. Preparation of minority teachers is deeply embedded in the mission of FVSU. To even begin meeting State need, the University System cannot afford to lower the number of teachers prepared by FVSU. Without a major change in program, it would be likely that more than 60% of the students preparing to become teachers at this institution would fail to become certified to teach. FVSU wanted to restructure its programs in ways that will turn around this situation. Since many of the students who attend this institution have not experienced academic success sufficient to allow them to be successful in traditional courses where the time is held fixed, by holding the standards constant and varying the amount of time and supplemental assistance available through the charter programs, more students should experience success.

Student Admission: There will be a two-tiered admission system:

• Freshman students will be admitted to the charter programs as pre-education majors.
• Admission to candidacy for teaching (typically in the junior year) requires students to have:
  • Achieved level 13 or higher on the Nelson-Denney Reading Inventory,
  • Passed the Regents' test,
  • Passed PRAXIS I (required for teacher certification), and
  • Met all standards established for the core curriculum to at least the proficient level, which will earn them an overall grade point average of 3.0.

Students who have not passed the Regents' Test after completion of 60 hours will be required to enroll in appropriate remedial courses. (See Request for Waiver Section.)

Student Support Services: All freshmen students who are pre-education majors will be required to receive instruction on test-taking strategies. All will receive ongoing advice about program requirements from an advisement center established specifically for the purpose of insuring that students are both informed and monitored. In addition, academic support resources will be available to students in the charter programs to assist them with development of skills in grammar, writing, reading, and mathematics that were not learned in high school. (See Academic Support Services Attached.)

Faculty: Faculty from the College of Education, College of Arts and Sciences, and College of Agriculture came together as partners to develop the charter program proposal. Under the leadership of the deans of education, arts and sciences, and agriculture, these faculty members will ensure that graduates meet the outcomes stated previously.

Curriculum: Students in the charter teacher preparation programs will complete the University System core curriculum and meet the same learning outcomes, as approved for FVSU. There will be two tracks within the core, as follows:

• Traditional sections, with time for the length of the course held constant and student performance varying as noted by grades A-F.
• Standards-based sections (required for students in charter programs and open to students in other majors), with standards for student performance held constant and the length of the time varying student to student. In order to earn credit for a standards-based core course students must master the standards set for the course to at least the proficient level. When the course ends, students will receive either the grade of A, B, IC, IPC, or F, as defined previously. A grade of A or B is required for a student to earn credit for the course.

Students transferring out of FVSU and desiring credit for courses in the standards-based sections of the core curriculum must have earned a grade of A or B. (See Request for Waiver Section.) Students transferring into the charter teacher preparation programs from other majors within FVSU or from other institutions and desiring credit for courses in the core curriculum will be assessed to determine their performance levels on the set of absolute standards set for the course in question. (See Request for Waiver Section.) If students meet the standards to at least the proficient level, credit for the course will be given. If students do not meet the standards to at least the proficient level, additional work will be required. Credit will be given to native FVSU students and to transfer students only when they have mastered the absolute standards set for the course to at least the proficient level.

In addition to the core curriculum, students will complete extensive upper-division coursework in the arts and sciences. Current projections call for students seeking certification in early childhood education to complete an interdisciplinary major that includes 15 semester hours in reading (taught by education), 15 hours of mathematics (taught by arts and sciences), 6 hours of natural science (taught by arts and sciences), and 6 hours of social sciences (taught by arts and sciences). Projections call for students seeking certification in middle grades to complete two 12- to 15-semester-hour concentrations from among English, mathematics, science, and social science and 6 to 9 hours in the other two fields to meet the exit standards. As with the core curriculum, absolute standards will be set for each course in the interdisciplinary major and the concentrations and student mastery must be at least proficient on all of the standards in order to fulfill program requirements.

The professional education sequence, including a minimum of 300 clock hours of field-experiences in the schools, is projected for 30 hours plus the internship. Exit standards for the professional education courses and the internship will require students to demonstrate proficiency on all of the program outcomes listed previously.

Both charter programs will total 126 hours. (See Request for Waiver Section.) The current estimate of the breakdown of credit hours for each program follows:

Early Childhood Education		Middle Grades Education
Core, Areas A-E:	42 Hours	Core, Areas A-E:	42 Hours
Interdisciplinary Major:	42 hours (includes 6 hours from Core Area F)	Two Concentrations + 6-9 hrs in 2 areas:	42 hours (includes 6 hours from Core Area F)
Professional Education:	30 hours (includes 12 hours from Core Area F)	Professional Education:	30 hours (includes 12 hours from Core Area F)
Internship:	12 hours	Internship:	12 hours
Total:	126 hours	Total:	126 hours

Funding: The institution will redirect some funds for these programs and will make these programs a top priority in requests for additional funding through the normal budget cycle.

Assessment: The Office of Academic Affairs will work with the institution to measure the success and continued effectiveness of the charter programs. The following data will be monitored:

• Baseline data: Numbers of students who are declared teacher education majors presently earning grades of A, B, C, D, F; number of incoming and outgoing transfer students in teacher preparation.
• Student progress: Freshman and transfer students monitored separately to program completion in order to validate the "proficiency" tests required for credit for transfer students and to see how many students repeated a course.
• Certification tests: Results monitored of first time test takers on PRAXIS I and PRAXIS II disaggregated by native and transfer students.
• Interim reports: FVSU will submit to the Central Office interim reports of student progress in the charter programs after two years and four years.
• Six-year review: After six years of experience with the Charter Program, FVSU in collaboration with the System Office of Academic Affairs will reach one of the following recommendations: continue the program as it is, specify needed revisions in the program, or close the charter programs.

Student Academic Support Services
Charter Teacher Education Programs

Area	Resources	Location	Type of work	Comment
Grammar and Mechanics	Perfect Copy Classic	219 Bond, 306 Hubbard	Students work on assignments until they master the skill.	Good for basic rules such as punctuation, pronouns, etc.
	Perfect Copy TechWrite Software	219 Bond, 306 Hubbard	Students work on assignments until they master the skill.	Good for coherence, conciseness, diction, sentences structure, etc.
	Learning Plus	306 Hubbard	Students are given individual accounts.	Good for grammar, math, and reading.
	Workbook of Grammar and Ideas	111 Hubbard, Campus bookstore	Students respond to questions by filing in the blank spaces.	Good for correctness, pre writing, and sentence combining.
	ACT practice books and CD's	111 Hubbard	Students do practice exercises on the screen or in booklets and get feedback from the program.	Multiple choice exercises on usage; also good on rhetorical skills.
	Peer and Faculty tutoring	124 Bond (Comm. Skills Center)	Students take a draft or a graded paper to correct grammatical errors.	Mostly walk-in, but appointments are also available.
	Peer tutoring	Counseling Center (Peabody)