May 15, 2003

Draft Workshop Notes

Thursday, May 15, 2003

9:30am-11:30am

via video and audio conference

1. Call to order and roll call

Voting members present:

Robert Sewell, Chair; President, UAS Staff Council

Larry Ledlow, President, UAF Staff Council

John Mitchell, President, Statewide Administration Assembly

Mark Fitch for Hilary Davies, President, UAA Assembly

Larry Duffy, Representative and Past President, UAF Faculty Senate

Joe Hayes, Executive Director, UAF Alumni Association, ex-officio, non-voting

Others present

President Hamilton

Joe Beedle, Vice President, Finance

Jim Johnsen, Vice President, Human Resources

A quorum was not reached so the meeting continued as a workshop.

2. Adopt agenda

No action was taken because of lack of quorum.

3. Approve minutes

No action was taken because of lack of quorum.

4. Chairs report

Robert Sewell made brief remarks at the Kenai Board of Regents meeting. Sewell is pleased the university is moving to outcomes based budgeting. He said there has been a disturbing trend to equate advocacy equal to splintering. He hopes dissenting remarks are not stifled and are retained. Another key item from the System Governance Council was its position on student wages and Sewell is pleased with the outcome. Line supervisors now have discretion in initial placement of student employees and Sewell is pleased about that. Also, during the next year, the System Governance Council will explore forming a task force to look at tolerance issues.

5. President Hamilton

President Hamilton revisited his process for sending items to the Board of Regents and for speaking to the Board. He asked that governance issues be vetted with relevant members of his executive staff prior to governance groups making motions that may not be doable. He spoke against a recent Staff Alliance chair request to have a standard staff governance agenda item on the Board of Regents Human Resources Committee agenda, stating that if issues had gone through the appropriate reviews (executive staff and the president) and have been turned down, that he would support bringing the item before the Board of Regents at governance request on a case by case basis. The Staff Alliance request was made in order to reinstate a practice of the previous statewide human resource director, who made it a point to have the Staff Alliance chair present with her at the table when presenting to the BOR committee—a practice not continued by the new vice president for faculty and staff relations.

Larry Duffy said that that there is a communication problem with the strategic plan in that the president’s staff should have involved governance early on, and not just present governance with a finished draft for input.

President Hamilton thinks it should come from the other direction. If you have a question, email the president and he will respond. His email address is mark.hamilton@alaska.edu.

What President Hamilton thinks happens is that people actually avoid bringing items to him and his staff because its more fun to dream the dream than to call in someone who may shoot it down. It’s not a matter of not trusting statewide but rather one of statewide will insert constraints.

Larry Ledlow said lots of people might take offense at the president’s remarks but Ledlow applauds it. He said in his experience in governance, he discovered that the university is a loose configuration rather than a hierarchy and more of a process problem in providing different points of view to people who matter. He said it was not clear to him or his colleagues when it is appropriate to invoke the review and comment process.

Ledlow asked if the president sees the university moving to a hierarchical process. President Hamilton said he fought against it for a long time because statewide staff is always a target, saying: “When you pool things, you hire a Karen Perdue who pulls together the whole healthcare nursing program and makes things work.” He added he can’t do that with everything but probably the time is right for some centralization. An example might be decentralize growth but centralize shrinking.

President Hamilton doesn’t believe governance comes close to exerting influence and counsels that they could. He said the only time students come together is during the legislative process and in putting together campaigns against tuition. Students can be very influential in recruitment and retention. The same is true of the Faculty Alliance and the Staff Alliance. When governance groups ask the president to get together with them, the answer is usually yes.

Larry Ledlow said it is easy to work smarter when there is a framework in which to do it.

President Hamilton said motions coming to him with deadlines for response don't work. He doesn't get tasked by staff. He instructed governance to go to his administrative staff first and find out what the story is or give them the idea and find out what can realistically be done. Healthcare is another huge issue. The university has to increase its contribution. Knowing this and actually getting the dollars to do it is another thing. There's an issue that will involve staff. If governance calls a meeting on healthcare, the president’s staff will be there. There are other areas in which this will work very well.

President Hamilton did go on to say that governance groups need to be talked to before administrative decisions are made. He believes informed advocacy is what governance should be all about. He doesn’t want cheerleaders but rather informed advocates and added that he and his staff need to do better to give governance thought and guidance.

Regarding the FY04 budget, President Hamilton said the university may be in some difficulty. The budget is currently in the hands of a House-Senate conference committee. The House version cuts $2.3 million from last year’s base budget. The Senate version is plus $7 million. At a $7 million increase, the university won't cancel programs but may centralize hiring and travel. There is a margin call coming up on retirement where PERS and TRS contributions could escalate. That and fixed cost increases as well puts the university in a tight position.

President Hamilton believes the university will do better in the FY05 budget cycle because the legislature will be coming into an election cycle just after the next session. He said income and sales taxes and PFD caps would alleviate state fiscal problems and that with a sales tax, the constitutional budget reserve could last another six to seven years.

President Hamilton said he won’t let the university melt. Governor wants a state forest, the proceeds of which will fund the Alaska Scholars program but there is no support in the legislature for the Alaska Scholar's program.

Given the indicators this year to last, the university should be looking at double digit enrollment and 500 Alaska Scholars this would put enrollment up 20 percent in two years.

Duffy said you could argue that if you are in the business of education, Alaska Scholars Program should be supported. The minute you use non-general funds to support university programs and salaries you will have to do it every year.

President Hamilton cautioned that the university receives the budget for next year the end of May and allocation decisions have to be made by July 1. There is no time to assuage some parochial interests. For instance, the university had to move the new research building because it was in the view of IARC and didn’t have time to visit with everyone about that. He indicated that “As a whole, we would like to but most we can do with governance is talk about general trends but not details about what to put in the budget.”

Duffy said for planning and communications issues, we need to be thinking two or three years down the line. President Hamilton said in the case of buildings it’s all political. He said it took five years to get a lab on the table but the Fairbanks courthouse came up as a blue light special and the university had to accept it. The same is true for the University Mall in Anchorage. When opportunity presents itself, it alters our original need. The University mall was originally for the community college mission but also needed to move the admissions administration down there.

Duffy said we need to compare it to the campus needs as stated in a strategic plan if only to discover whether or not it meets need and/or the plan needs to be adjusted. Sometimes we just have to say no to the opportunity if it doesn't meet strategic plan.

Robert Sewell said there is hardly anyone who puts up with the riptides the president does.

Sewell has 7,000 documented contacts with Alaska Scholars and knows that the Scholars have had a positive impact and greatly improved the whole culture of the campus.

Sewell said the UA budget advocacy processes have to be distributed equally. He was totally befuddled that the university wound up in the position of being pitched against K12. He felt the university needed to instill the K16 concept of education. Without that, Sewell said the university misses a significant opportunity to build a coalition.

President Hamilton responded that there was enough of a nesting of the university within "education" for the university to disappear but this is gone forever. The pitching of K12 against the university was too good and too powerful for Anchorage superintendent of schools and the president not to stand together but Hamilton said “it will haunt us forever.”

President Hamilton said Governor Murkowski never intended to pitch K12 against the university He actually thought some things in K12 needed to be looked at. He funded the university because he believes in the university. The university's advocacy is powerful but not as powerful as k12. We have to be advocates of k12 until they are fully funded or we will not be on the plate again, ever.

Duffy responded that the university’s teacher education plan fits in with the strategic plan and this should help.

President Hamilton’s theme for next year’s budget is "If you are not in the constitution, you should be on the table.” He added that “You have to fund the constitutional mandates first.”

Robert Sewell said the complexity of what governance takes up is significant. When we look to future chairs we need to recognize that at least a half time FTE in release time funds is a significant part of that.

Sewell said the second area for realization of potential is to look more closely at what the alumni associations are doing. On our campus we don't have a career placement service. I disagree with the faculty notion that we don't have to take care of where students go when they graduate. There's gold in the alumni associations.

About the communications process, Sewell said in terms of seeking staff input to the Board of Regents, there was no intention of circumventing the president. Many governance leaders are confused about how that governance input should come about. Public testimony doesn't do it. It has previously seemed as though the Board of Regents HR committee was the place for staff governance input. The former statewide human resources director agreed and made statements about inviting staff to the table to discuss things with that committee and indeed, this has happened. Sewell is searching for ways to improve the flow of communication. Governance groups were startled when statewide made decisions without governance input that appear on their face to be uninformed. There were a couple of startling action items at the Board of Regents in the Human Resources Committee that staff governance had not previously seen and this was disconcerting.

President Hamilton urged governance to understand that the Board of Regents has given instructions about having the least amount of people possible present at Board of Regents meetings. Regents are particularly sensitive to governance groups and administrators grouping their own meetings around Board of Regents meetings just so they can attend BOR meetings. When this happens, a one-day meeting becomes a 2 day meeting or 3 day meeting and cost more money. There is no question that there is more information at Board of Regents meetings but it costs more. Also boards behave differently in public then they do when meeting in relative privacy.

The next Board of Regents meeting will be a trial run where only the chancellors and vice presidents are in the room and vice chancellors and others are teleconferenced or video conferenced in to the meeting. He specified that the chairs of the Faculty Alliance, the Staff Alliance, the System Governance Council and the Speaker of the Coalition of Student Leaders should be at regents meetings but no one else, including other student leaders. Others can attend by video or audio conference.

The question is how can concurrent regents’ committee meetings be teleconferenced or audioconferenced simultaneously?

6. Budget status for 2004

Joe Beedle reported that the university budget comes in the Joint House and Senate conference committee today. Beedle and the Business Council have started to practice decrement scenarios for FY04 and then will move forward to develop the budget for FY05 from there.

The FY04 budget program initiatives are driven on a couple of commitments: one being nursing where there is a significant private match. The university’s portion is about $400,000. The other one is in development where the Rasmuson Foundation gave the university a development match grant of $250,000 to hire a development director, and do a database. That has to go to the base general fund budget this year. That's going to come off the top and the rest will be distributed toward fixed costs. Campuses will have to absorb the difference between the allocated money and fixed costs. This means some program and discretionary areas will not be funded.

How does this effect the development of the FY05 budget? The Board of Regents will be giving the guidelines for developing the FY05 budget at the June Board of Regents meeting.

In the distribution of the FY04 budget, we have to look at what's important in terms of the strategic plan. Beedle added that diversification of revenue source for the university is even more critical that it has been in the past. The volume of students is up 10 percent and the price of tuition is up 10 percent this fall so we will get some money there. President refers to research and students as consumers because very little of the non-general funds received cover the actual costs of research and courses.

7. Budget status for 2005

Beedle gave examples of a spreadsheet metric for how the university responds to outcomes in FY05. University leadership has been practicing since January to deliver to the Board of Regents to recommend that the metric be used in the development of the 05 budget. The budget process information is on the web at http://www.alaska.edu/swbudget/process/budgetprocess.html. The metric is located on the web at http://gov.alaska.edu/Council/correspondance/2003-05-09-pitney-status-ua-outcomes-targets.pdf

Governance has not had time to have input into the development but this will tie well into the legislature in terms of their missions and measures.

What is the access to the systemwide administrative councils are the major advisory groups that have major input into the process? The chancellors and the president felt that the System Governance Council was the place to go and deliver the information first; then to the other governance groups. This is the first step in the process and successive steps will be much more inclusive.

These sheets will be distributed extensively over the summer and in September-October and first week in November there will be a lot of opportunity to interact.

Larry Duffy responded that the university has this huge governance system and its governance that has to go out and sell these things, so governance naturally wants to be more involved in the process.

Joe Hayes said that the alumni want more input into the budget process if they are going to continue to advocate for the university budget. The alumni boards want to know now exactly at what level they can be involved in the process and when.

Beedle responded that input from the alumni groups’ perspective would be sought after the Board of Regents sees the drafts.

Johnsen said that communication will be shot out to everyone who has an email address within the UA system. Hayes responded that new folks on the UAF alumni board want input into the budget development before going to Juneau to advocate for the university budget. Beedle said he has personally met with the alumni board in the past but may not have met with the new board members.

Beedle said the top sales feature for FY 05 is the momentum of the university and its participation in the state economy and that the momentum of the engagement and the excitement over what has been done will continue because of the university’s responsiveness to state needs and focus on service will help out.

He said it doesn’t hurt that the Governor lives down the street in Fairbanks and likes to drop by the university when he is in town. He wants to talk about applied business and workforce stuff that he doesn’t get in other state departments.

The revenue diversity has really kicked in and the legislature will expect more and more as time goes on. The university has turned on the entrepreneurial engine to do those things. That is an opportunity to continue these things and making them more efficient. The university has to take care of people and facilities and cannot return to the time when we just don't do maintenance. In this year's budget the amount of money to do that is $2 million and most will have to come from internal allocations through tuition, cost recovery and land grant investments. In addition there are contract commitments, Alaska Scholars, etc. Reserves have shrunk because of healthcare cost increases and increases to PERS and TRS contributions.

Regarding aligning programs to strategic plan, Duffy had questions about the budget. Johnsen said Mattox came in and developed the tools for reallocation to match the strategic plan.

Duffy said that if faculty don't have input into the process, they won't buy off on the product. Faculty are not enthused about the Systemwide strategic plan

7. Meeting calendar

The meeting calendar is in development. Since the president attends the quarterly meetings, the meetings will have to fit in with his schedule. No meetings can be held on the second Thursday of November from 1:00-3:00 because the UAA Assembly whose officers are members of the Council meets during that time.