Meeting Minutes - April 2005

Minutes of the Meeting of the Board of Regents of the University System of Georgia
Held At Armstrong Atlantic State University
Savannah, Georgia
April 19 and 20, 2005

CALL TO ORDER

The Board of Regents of the University System of Georgia met on Tuesday, April 19, and Wednesday, April 20, 2005, in the board room of the Armstrong Center Technology Conference Center at Armstrong Atlantic State University. The Chair of the Board, Regent Joel O. Wooten, Jr., called the meeting to order at 1:00 p.m. on Tuesday, April 19, 2005. Present on Tuesday, in addition to Chair Wooten, were Vice Chair J. Timothy Shelnut and Regents Hugh A. Carter, Jr., Connie Cater, William H. Cleveland, Julie Hunt, W. Mansfield Jennings, Jr., James R. Jolly, Donald M. Leebern, Jr., Elridge W. McMillan, Martin W. NeSmith, Patrick S. Pittard, Doreen Stiles Poitevint, Richard L. Tucker, and Allan Vigil.

Chair Wooten thanked President Thomas Z. Jones of Armstrong Atlantic State University for hosting this meeting of the Board of Regents.

ATTENDANCE REPORT

The attendance report was read on Tuesday, April 19, 2005, by Secretary Gail S. Weber, who announced that Regents Michael J. Coles, Joe Frank Harris, and Wanda Yancey Rodwell 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 8 and 9, 2005, were unanimously approved as distributed.

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SPECIAL PRESENTATION ON ARMSTRONG ATLANTIC STATE UNIVERSITY

Chair Wooten recognized former Regent and former Commissioner of the Georgia Department of Transportation, J. Tom Coleman, Jr., who was in attendance at the meeting. He then called upon President Thomas Z. Jones of Armstrong Atlantic State University ("AASU") to introduce some other special guests and to make a presentation to the Board on AASU.

President Jones welcomed the Regents to Savannah and AASU. He said that he was delighted to have the Board and University System Office staff at AASU for the April meeting. He then invited Vice Chair Shelnut to make some welcoming comments as well.

Vice Chair Shelnut remarked that is was a pleasure to be in Savannah at AASU. He said that the Regents are extremely proud of the institution and looked forward to spending the next few days there.

President Jones noted that there were special guests in attendance at this meeting who would like to extend their greetings and welcome. He said that Dr. Otis Johnson, Mayor of Savannah and alumnus of AASU, could not be in attendance, but he wanted President Jones to extend his greetings and a welcome from the City of Savannah. President Jones then called upon the Chair of the Chatham County Commission, Pete Liakakis, to make some remarks.

On behalf of the Chatham County Commission, Mr. Liakakis welcomed the Regents to Savannah. He said that Savannah is home to two great System institutions: AASU and Savannah State University. Under the leadership of President Jones, AASU has taken off to great heights. This helps the City of Savannah, the region, and the state. Mr. Liakakis thanked the Regents for their important work on behalf of the University System of Georgia. He noted that the motto of AASU is "Learn today, lead tomorrow." Many AASU graduates have gone on to leadership positions, such as Senator Eric Johnson. In closing, Mr. Liakakis thanked the Regents for coming to Savannah and encouraged them to tour the historic district, which is currently the number one historic district in the nation.

President Jones noted that the legislature had recently concluded its work and that it was a good session. He remarked that the local legislative delegation has been extremely supportive of higher education. He then called upon Senator Eric Johnson, President Pro Tempore of the Georgia Senate, to make some remarks to the Board.

Senator Johnson welcomed the Regents back to Savannah and said that he appreciated the leadership they provide for the University System of Georgia.

President Jones noted that much of AASU's successes is attributable to its two foundations: the Armstrong Atlantic State University Foundation, Inc. (the "Foundation") and the Educational Properties Foundation, Inc. ("EPFI"). He then called upon the Chair of the Foundation, Brian Foster, to make some remarks to the Board.

On behalf of the Foundation, Mr. Foster welcomed the Regents. He said that both of AASU's foundations are very actively supportive of the institution. He noted that the Board was meeting in a facility that the Foundation recently acquired for AASU. The facility was formerly a Publix shopping center adjacent to the AASU campus. In the three years since he has been on the board of the Foundation, it has more than doubled its assets. The Foundation had just completed its annual three-day corporate community fund-raising campaign. Last year, the Foundation raised over $100,000 in three days. This year, the Foundation set a goal to increase the campaign by 50% and exceeded that goal. Mr. Foster remarked that this demonstrated the strong local support for AASU. He also said that the Foundation understands that its role is to support the growth of the institution. The student population is growing because there is such need. AASU educates the majority of the region's healthcare professionals, law enforcement officials, and teachers. Mr. Foster congratulated Regent Tucker on his appointment to the Board and thanked all of the Regents for being in attendance.

Finally, President Jones called upon Ray Gaster, Chair of AASU's Educational Properties Foundation, Inc. ("EPFI") and AASU alumnus, who would be the official host for that evening's gathering at Richmond Hill.

Mr. Gaster welcomed the Regents to Savannah and ASSU. He said that there would be a reception at the Main House on The Ford Plantation, which was Henry and Clara Ford's home. Following the reception, Mr. Gaster and his wife, Catherine, would host a low country boil at their home in Richmond Hill. He noted that the dinner would be catered by the Skidaway Institute of Oceanography ("SkIO").

President Jones then recognized the following special friends of the university:

Amanda D. Seals, Chief of Staff, Office of the Senate President Pro Tempore
Former Representative Ann R. Purcell, Foundation trustee
Mr. Paul P. Hinchey, President and Chief Executive Officer of St. Joseph's/Candler hospitals
Dr. Irving Victor, AASU alumnus, Foundation trustee, former chair of the Armstrong Junior College Commission, and the first person to receive an honorary degree from AASU
Steve Greene, former Foundation trustee
J. Cliff McCurry, Foundation trustee
Dan Flynn, Savannah Chief of Police

President Jones next called upon Philip Pope, the newly elected president of AASU's student government association ("SGA").

On behalf of the SGA and the students of AASU, Mr. Pope extended a warm welcome to the Regents. To some, college is a destination for achieving higher education, and for others, it is a template for exemplifying their extraordinary talents, skills, and helpfulness. AASU has allowed students to interact with each other, faculty, and staff in many ways in and out of the classroom. Mr. Pope said that he has watched both the students and the university mature in recent years. He found his niche in community service. Through the SGA, the Campus Union Board, and the Nick Mamalakis Emerging Leader Program, he learned the importance of organization, planning, programming, and communication. These skills have helped him face and rise above adversity. Mr. Pope said that he is just one of many AASU students who will populate the community with quality, respectful, diligent, and ethical professionals.

President Jones noted that the university's senior administrative team was also in attendance. He asked them to stand and be recognized. Those administrators were as follows:

Patricia S. Reese, Executive Director of University Relations and Marketing
Dr. William L. Megathlin, Assistant to the President for Strategic Initiatives
Dr. Edward Thompson III, Vice President and Dean of the Faculty
Dr. C. Leary Bell, Vice President for External Affairs
James Brignati, Vice President for Business and Finance
Dr. Joseph A. Buck, Vice President for Student Affairs

President Jones said that he would like to take the next few minutes to share the AASU story with the Regents. He would do this in four chapters. The first chapter would be a very brief history of the institution. The second chapter would be about the students. The third chapter would focus on academic programs and faculty. The final chapter would be President Jones' vision for the university.

In 1935, at the corner of Bull and Drayton Streets adjacent to Forsyth Park in downtown Savannah, the college was established in the Armstrong House with an initial enrollment of 165 students and 8 faculty and staff. In 1959, the college became a two-year unit of the University System of Georgia, and shortly thereafter, the Board of Regents conferred four-year status on what then came to be known as Armstrong State College. By the early 1960s, it became apparent that the college was running out of space. Through the generosity of community leaders, a donation of 250 acres of land was made to the University System, located on the south side of Savannah, as a new home campus for the institution. At the time, the site was on the outskirts of the city. There were no paved roads leading to the property, and it was covered with an undergrowth of vegetation. In 1964, site development and construction began for the new Armstrong State College campus. The first phase of development resulted in six academic buildings surrounding a central quadrangle with crosswalks modeled after the famous downtown Savannah squares.

Over the past 39 years, the campus has grown significantly. New buildings have been added, and today, AASU serves over 7,000 students. During the past five years, the university's enrollment has grown by nearly 30%. Shortly after President Jones' arrival, AASU updated its campus master plan, which revealed that AASU was rapidly running out of space. In 2002, AASU created a second foundation, EPFI, to assist the institution in identifying creative ways to address the institution's space needs. In just three short years, with the help of EPFI and with the Regents' support, AASU has been able to make significant strides in addressing its space needs. In fall 2002, the institution opened its first student housing complex, Compass Point, with 280 beds. With the Board's support, AASU immediately planned a second phase of housing, and in fall 2003, it opened an additional 280 beds. Since opening, the dormitories have had 100% occupancy.

In 2003, AASU learned that the Publix shopping center complex, where this meeting was being held, was available for sale. Again, with the help of EPFI, the staff of the University System Office, and the Board's Committee on Real Estate and Facilities, chaired by Regent Nesmith, the Foundation purchased the complex and a small commercial apartment complex directly behind it. Last spring, AASU renovated the apartment complex and renamed it University Crossings at Compass Point. It has 104 student beds. With the Board's approval on Wednesday, the Foundation would move forward with a bond issue that will allow AASU to begin renovation of this shopping center. This center will add 115,000 square feet of floor space for use by the university. The rear portion of the former Publix will be the new home for AASU's plant operations facilities. The front portion of the former Publix will be converted into a two-story professional and continuing education center with space for additional classrooms, computer labs, and academic departments. The out parcels will be renovated to provide space for academic and institutional support service operations, freeing up space on the main campus for additional classrooms and related space. Earlier this year, AASU began construction on a new indoor student recreation center. It will be completed this summer and will serve as the temporary home for the university's library next year while AASU begins a total renovation of the 39-year-old Lane Library.

President Jones showed the Regents a picture of the campus, noting that the highlighted facilities were purchased, designed, and constructed with private dollars. No state funds were used in those capital projects. These projects comprise a private investment of over $60 million by the Foundation. He said that none of this could occur without the Foundation and support from the Board of Regents, and he thanked the Regents.

Next, President Jones discussed AASU's students. He said that while brick and mortar are important, the students served are paramount. As an urban-centered state university, AASU serves students of all ages, ranging from 17 to over 70 years of age. At AASU, 80% of the students are Georgians, coming to the university from across the state. The remaining 20% come from 48 different states and 62 foreign countries. Seven out of every ten students at AASU are female; and one-third of the student body is comprised of minorities; with nearly one in four students being African- American.

President Jones said that he wanted the Regents to meet one of AASU's graduates to learn first-hand from her how her experiences at the institution prepared her for a career. He called upon Ms. Christy Sumner, a 2003 graduate of AASU's Nursing program. Ms. Sumner is currently with St. Joseph's/Candler hospital system serving as an operating room nurse.

Ms. Sumner greeted the Regents and said it was an honor to represent the graduates of AASU. When she made the decision to pursue a career in nursing, she knew it would not be easy. She began college in January 2000 and graduated in December 2003 with a Bachelor of Science in Nursing degree. Beginning college at age 31 with a family was frightening, Ms. Sumner said. However, her experience at AASU was the best. Having the campus and the nursing program so close to home was a true advantage. With the demands of raising a family, there was no way she could have commuted to a further institution. The HOPE Scholarship made it possible for her to go to school without major financial sacrifice, and she would be forever grateful for that. Most important to her were the highly qualified professors at AASU, particularly the professors in the nursing program. They were like parents in that they genuinely cared for, supported, and wanted the best for their students. Ms. Sumner said that AASU has greatly blessed her and her family with an awesome profession in healthcare. She worked at Memorial Hospital as a nursing student, and she did her practicum at Candler Hospital, where she was offered a job upon graduation. She began in postpartum nursing, moved into labor and delivery, and now works in the emergency room. At Candler Hospital, she works with nursing students, which enables her to give back to AASU. In closing, Ms. Sumner said that she looks forward to her future in healthcare and that she appreciates AASU for providing her with an education that allows her to touch lives daily.

President Jones remarked that AASU is a "teaching university." Its faculty are in the classrooms and laboratories teaching students. AASU has a very well credentialed and highly qualified faculty corps that offers over 75 academic degree programs at both the undergraduate and graduate level. The university's motto is "Learn today, lead tomorrow." This leadership theme is woven into the university cultural fabric - in its academic programs, in its student life programming, in its faculty and staff development activities, and in service to its community. It is central to AASU's mission. Building upon this mission, AASU has identified four strategic directions for academic program development, as follows:

The liberal arts - including the study of the humanities, social sciences, and fine and performing arts, forming the core foundation of AASU's academic programs.
Science and technology - with programs building upon AASU's solid reputation in physical and life sciences, its nationally accredited programs in computer science and information technology, and its partnership with the Georgia Institute of Technology ("GIT") in the delivery of the Georgia Tech Regional Engineering Program ("GTREP").
Teacher preparation - AASU offers a full array of teacher preparation programs at the undergraduate and graduate levels. The institution is a leader in the statewide Partnership for Reform in Science and Mathematics ("PRISM") initiative. Over 50% of the teachers in AASU's region who have won teacher of the year awards at their schools or in their school districts are AASU graduates. Over 30% of the university's teacher education graduates each year are African-Americans.
The health professions - AASU has the most comprehensive college of health professions in the State of Georgia. The university offers 21 degree programs in the health professions, and with the Board's help in the future, it will be able to expand this extremely important strategic mission.

The expertise and talents of AASU's faculty, staff, and students are constantly serving the development needs of the Savannah community and enriching the economic prosperity of AASU's region and the state, stated President Jones. AASU's success thus far in delivering on its mission and strategic vision needs to be credited to the staff, faculty, alumni, foundation board members, community friends, and the members of the Board of Regents. Without this support, he said, AASU would not be the university it is today.

As he had noted, one of the real strengths of AASU is found in its faculty, an amazing group of well- educated and dedicated professionals. President Jones then introduced Dr. Helen Elizabeth (Beth) Howells, Associate Professor of English. He said that she is much more than just a professor; she is a campus and community leader. He invited Dr. Howells to share some of her thoughts and observations with the Regents.

Dr. Howells said that she was delighted to be present to give voice to the collective experience of the faculty using her individual voice as an example. She said that two early experiences with students came to characterize her mission at AASU and reinforce her decision to work at the institution. The first incidence came about during a conversation with a young woman as she was taking the first literature course that Dr. Howells taught at AASU. The student was a hard worker who was engaged, attentive, and insightful, and this showed in her course work. Dr. Howells learned that the student was a young single mother who worked full-time and took classes at night. She lived in a small house with her parents, who were raising a niece and nephew in addition to the young mother's daughter. In the course of conversation, Dr. Howells and the student were talking about active reading. She learned that the young woman did her homework in her car in the driveway at night. She needed to be home near her family, but she also needed quiet to do her school work. The student's story was not unique, said Dr. Howells, and she would return to it in a moment.

In the second course Dr. Howells taught, there was a student approximately twice her age who would come to see her in the months following the course just to check in. She had gone on to enroll in the nursing program, so Dr. Howells would not be teaching her in future classes, but they had developed a rapport. Dr. Howells encouraged the student to call her Beth instead of Dr. Howells. The student responded that she did not want to call her teacher by her first name because she already had many people in her life she could call by their first names. She knew very few professors, and she was proud to be in college and to know those professors she did. She was glad to have a Dr. Howells to call her own.

Dr. Howells said that these two stories illustrate the responsibility of faculty to their students. Many students work harder and have more complicated lives than the faculty will ever know. They have fewer resources and role models than many faculty had growing up. They need and depend upon their faculty. Dr. Howells said that she owes the students her preparation and commitment, but the students also have much to teach her about how best to learn. Faculty bear a tremendous responsibility as leaders to give students space to learn, a place beyond a car, a place to spread their wings and to try new things, to broaden their horizons, and to become educated citizens. The second part of faculty responsibility is to give students a familiar face that recognizes them, a face they can turn to and connect with in higher education, a Dr. Howells they can call their own. She said that the AASU faculty recognize their role as leaders. Their work continues beyond the classroom walls with students when conferencing and advising, in the hallways and during activity periods, as they create spaces for learning to take place as they give a face to higher education. The work faculty do on initiatives like the new student scholarship symposium, the honors program, and the study abroad program, to name a few, are opportunities they create. These efforts are equally central to their mission as educators. As circumstances like classroom size and teaching loads become taxing, faculty turn to one another for inspiration and encouragement. The faculty must work together to bear this responsibility. They are encouraged and energized through faculty development and collaboration. The faculty lecture series, field trips, symposia, and learning communities help them inform each other and renew their efforts to reach their very particular student population. Their tremendous responsibility is and must be shared through their joint efforts. In closing, Dr. Howells said that the work of the faculty is a vocation at AASU.

President Jones reiterated that all of AASU's programs build upon the leadership theme to ensure that the institution's graduates will become tomorrow's leaders. Dr. Howells and her faculty colleagues are promoting leadership in their classrooms, laboratories, and mentoring activities and by their own leadership conduct.

Next, President Jones said that he wanted the Regents to hear from a parent of one of the university's graduates. Robert Colvin also is a trustee of the Foundation and Chief Executive Officer and President of Memorial Health University Medical Center (the "Medical Center"), Savannah's largest employer of "knowledge workers." Mr. Colvin could not attend the meeting in person but graciously agreed to speak to the Regents through video technology. He would, however, be in attendance at that evening's social event at the Ford Plantation.

Mr. Colvin said that his son graduated from AASU five years ago and now teaches at an inner-city middle school in Savannah and that he was proud of all the graduates of AASU. He noted that the Medical Center employs 4,800 and has had 500 job openings in the last four years. The Medical Center enjoys a great relationship with AASU. President Jones and his staff work with the Medical Center to provide trained health professionals through traditional and "fast-track" programs. This year, all health professions programs at AASU are at capacity, and yet, there is still an overwhelming demand for more graduates in these fields and this demand will grow as the population ages. In closing, Mr. Colvin said that AASU is one of the great resources for health profession graduates and that the Medical Center wants to help AASU grow its health professions programs.

Finally, President Jones discussed the future of AASU, which he said will be bright with the Board's continued support. AASU is projecting continuous enrollment growth, probably in excess of 30% over the next five years and with the need to serve 10,000 students by 2010. The university will need to expand and diversify its academic program mix in order to address student demand and regional and state needs. AASU anticipates new program development in its strategic mission areas: liberal arts, science and technology, teacher education, and health professions. The institution plans to continue to expand its regional presence and services at the Brunswick and Camden Centers in partnership with Coastal Georgia Community College and at the Liberty Center in partnership with Waycross College. AASU plans to continue work on campus expansion with new facilities, some of which President Jones would point out to the Regents on their campus tour later that day. In closing, he thanked the Regents for visiting AASU and said that he looked forward to more informal discussions with them during their visit.

Chair Wooten thanked President Jones and all of the speakers for this outstanding presentation about AASU. He said that education is very important for the Savannah area and that AASU is doing a great job, together with its sister institutions, to help the Board of Regents in its effort to create a more educated Georgia.

President Jones recognized Becky Smith, Office Manager for the Office of the Assistant to the President, who was primarily responsible for planning this meeting of the Board of Regents on the campus of AASU. He also thanked Dr. Megathlin for his hard work in this regard.

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

Chair Wooten next convened the Committee on Finance and Business Operations as a Committee of the Whole and turned the Chairmanship of the meeting over to Regent Pittard, the Chair of the Committee.

Chair Pittard thanked the Regents for working with state legislators for the past several months on the budget for the University System of Georgia. The Chancellor and senior staff had reviewed the allocation principles and the budget processes. They had also studied the tuition process and the mandatory student fee proposals. The allocations recommendations reflect a vigorous process and some slight modifications that the Chancellor and the Vice Chancellor for Fiscal Affairs, William R. Bowes, would discuss. Chair Pittard explained that there were five action items that the Committee on Finance and Business Operations would consider as a Committee of the Whole at this meeting: fiscal year 2006 budget allocations (Item 1, pages 25 to 29), fiscal year 2006 tuition (Item 2, pages 29 to 31), fiscal year 2006 mandatory student fees (Item 3, pages 31 to 33), fiscal year 2006 salary and wage administration policy (Item 4, page 33), and the fiscal year 2005 amended budget (Item 5, pages 33 to 34). He asked the Chancellor to begin the presentation on the first four items of the agenda.

On behalf of the University System Office staff, Chancellor Meredith thanked the Regents for all of the time they put into the budget process to ensure the University System is going in the right direction under the leadership they have provided. This has been a good budget year, he remarked, and the Board is thankful for the Governor's strong budget recommendation and for the support of its partners in the General Assembly. He said that this is a good investment for the state, which will reap great rewards from the activities of the University System of Georgia. The economy is recovering, and the staff are confident that the System has seen the last of the budget cuts. The overall fiscal year 2006 budget represents an 8.5% increase over fiscal year 2005. This is the highest budget increase in nine years. The System now receives 11.5% of the state's budget, up from 10.9% in fiscal year 2005. There remains much work to be done if the System is to be successful in increasing the numbers of Georgians pursuing higher education. The institutions have many pressing priorities, and at the top of the list for all institutions is to increase the numbers of full-time faculty. In order to address budget cuts in recent years, the institutions have had to rely increasingly on part- time faculty, leaving full-time faculty positions unfilled. Now, the System can begin to reverse that trend. The allocation strategy this year uses 80% of the enrollment funds in the formula to offset the major budget cut that the System took last year and then to provide funds to those institutions with increasing enrollments. The other 20% goes to a number of initiatives, including teacher education programs at Macon State College ("MSC") and Dalton State College ("DSC"), transition funding for a new state college in Gwinnett County, support for Coastal Georgia Community College's ("CGCC") Camden Center and Floyd College's ("FC") Bartow Center, and support for the research universities.

Chancellor Meredith stated that the budget includes an additional $5 million of tobacco settlement funds for the Medical College of Georgia ("MCG"). The budget also funds the Advanced Academy of Georgia at the University of West Georgia ("UWG") and supports Columbus State University ("CSU") as it tries to meet the needs of a growing military population at Fort Benning. The staff attempted to address the priorities at each institution while remaining fair and meeting the strategic needs of the System as a whole.

Overall, tuition is driven by a model in which the state provides 75% and the System must raise 25%, explained the Chancellor. That is about $45 million that the System must raise in fiscal year 2006, which is a 6.5% overall increase in tuition cost for the System. Therefore, the staff were proposing an 8% increase at the research universities and a 5% increase at the two- and four-year institutions. Even with those tuition increases, tuition in the System will still remain remarkably low, particularly in comparison to other states in the Southeast. The four-year institutions will be sixteenth out of 16 Southern Regional Education Board ("SREB") states. Low tuition for access is an admirable thing to brag about until the System arrives at a point of diminishing returns when it cannot provide the funds to enhance quality, he said. The goal is to create a more educated Georgia, and the budget allocations proposed at this meeting would help the System continue on this path. Chancellor Meredith then turned the floor over to Mr. Bowes.

Mr. Bowes noted that in fiscal year 2005, the System had a midyear budget reduction of $64.8 million, which figures into the allocation recommendations for fiscal year 2006. In fiscal year 2005, the System ended up with an adjusted state appropriation of just over $1.4 billion in formula funds. The formula increases for fiscal year 2006 were $90.4 million for enrollment growth of about 5.7%. The System also received funding for maintenance and operations of new square footage of $7.7 million. Mr. Bowes noted that this figure includes funding for the increase sewer rate charges for the Atlanta area institutions: Atlanta Metropolitan College ("AMC"), the Georgia Institute of Technology ("GIT"), and Georgia State University ("GSU"). Finally, $5.3 million is included in the budget to cover the cost of fringe benefits for new System retirees. The total formula budget increase for fiscal year 2006 is $103.4 million.

There were also transfers to the formula from the special funding initiatives, specifically the Georgia Tech Regional Engineering Program ("GTREP") and the information technology program at Georgia Southern University ("GSOU"). Also, funding for the retiree benefits for employees of the Cooperative Extension Service of $1.6 million has been moved into the formula and taken out of the separate budget for the Cooperative Extension Service. This had to do with a long-standing issue of retirees' not having their benefits paid by state funds. So, this change takes care of that issue permanently. Public service institutes had an austerity cut averaging 3% per institute. The System also received funding of approximately $28.5 million for salary increases and the annualization of the increase in fiscal year 2005. Mr. Bowes reminded the Regents that the System had an average 2% salary increase in fiscal year 2005 that went into effect in the middle of the year. So, this allocation provides the balance of that 2% and provides a 2% salary increase that will go into effect January 1, 2006. So, the total formula budget is just over $1.58 billion, an approximate 9.7% increase.

There were no major changes in the special funding initiatives aside from the transfers of funding to the formula budget. There was an austerity reduction for all of the special funding initiatives of 3%, but there were also some significant enhancements. One enhancement is $5 million so that MCG can continue its faculty research initiative. There is another enhancement of $375,000 for the Georgia Academy of Mathematics, Engineering, and Science ("GAMES") at Middle Georgia College ("MGC"), and there was an enhancement of $450,000 to continue the work of the Georgia Leadership Institute for School Improvement. Overall, the System had a slight increase of about $1 million in special funding initiatives. So, the total state appropriations to the University System of Georgia approximate just under $1.59 billion.

Other organized activities, including all of those activities that are line-item funded by the General Assembly are part of the appropriations for nonteaching unit "A" activities. These include the University System Office, the Georgia Public Library Service ("GPLS"), the summer enrichment program at MCG, and the Office of Minority Business Enterprises. In fiscal year 2005, these activities had an appropriation of $185 million. Some of the items were transferred to the formula budget in fiscal year 2006, and there were also austerity reductions of approximately $1.8 million. There were also some minor enhancements of approximately $10.4 million, including $2 million for GPLS. So, the final state appropriation for other organized activities was $192.6 million for fiscal year 2006.

The last piece of the budget is the research consortium, said Mr. Bowes. The major change for fiscal year 2006 in this regard is that funds that had been appropriated to the research consortium from the Georgia Cancer Coalition are now being moved back to the Governor's Office and those funds will be paid from the Governor's Office in the amount of $6.2 million. After some austerity reductions, the research consortium funding went from $26.9 million in fiscal year 2005 to $21.287 million in fiscal year 2006.

The overall increase in funding to the institutions is approximately 9.6%, mostly in formula funding. In terms of other organized activities, there is a slight increase of $1.8 million, or just under 1%. The total state appropriations for the University System of Georgia for fiscal year 2006 increase by $140.1 million, or 8.5%.

Mr. Bowes next discussed what the staff were recommending in terms of allocations for fiscal year 2006. He noted that the University System Office staff held meetings with the presidents and their senior staff members in March. They discussed institutional priorities, System strategic initiatives, tuition and fees, and other issues affecting the institutions. They use that information to develop the allocation recommendations. The staff also review the budget allocations with the Regents to get their feedback before they come forward with allocation recommendations. This year, 80% of the formula growth funds are allocated to institutions. That represents $72 million of the $90.4 million formula budget. This year, the staff were proposing a slight change in how those funds will be distributed. First of all, $34.3 million will be distributed based upon the institutional share of the state budget to partially offset the loss from the midyear budget cut of $64.8 million. In October 2004, the Board of Regents decided that $27 million of that cut would come out of the health insurance reserve as a credit to the premiums being paid by the institutions. Another $9.4 million would come from funds that would lapse in the fiscal year 2005 budget. As 2006 approaches, the System does not have that option to help support the institutions in meeting that cut. So, that $34.3 million is an attempt to address the budget cut. The balance of the $72 million, approximately $38 million, will be distributed to the institutions based upon their enrollment growth as if generated by the formula. As in recent years, funds for physical plant growth will be allocated back to institutions based upon what they have generated in the formula. Salary annualizer funds will be allocated on the basis of actual need. Likewise, the salary increase funds for fiscal year 2006, $16.1 million, will be allocated to institutions based upon actual numbers of employees and their current salaries. Retiree fringe benefit funds of $5.3 million will also be allocated based upon actual need.

The staff were recommending that 20% of new formula funds plus other prior year funds, a total of $20.4 million, be allocated as follows: 1) $6.8 million to partially offset the losses that institutions may experience under the formula due to significant enrollment growths, 2) $1.6 million for the start- up costs of the proposed state college in Gwinnett County, 3) $7.8 million to fund major System and some institutional priorities, and 4) $4.2 million to meet the ongoing needs of the Office of Information and Instructional Technology ("OIIT"), for which the System has not received any funding in the last couple of years. Mr. Bowes noted that Appendix I of the Committee agenda shows how these funds are to be distributed to each institution and each agency within the University System of Georgia. Appendix I also included detailed information on the fiscal year 2006 budget.

Next, Mr. Bowes discussed tuition recommendations. He said it is important to recognize that the University System and its institutions have some of the lowest tuition rates in the nation. Nationally, the System is thirty-ninth in tuition and fees with regard to its flagship institution, UGA, and forty-ninth among comprehensive two- and four-year colleges. This is based upon information provided annually by the Washington Higher Education Coordinating Board. Last year, the System ranked thirty-fifth and thirty-ninth, respectively, in these categories. What is more significant is how Georgia compares regionally at other SREB states. In 2001, the System's four-year colleges ranked twelfth among the 16 SREB states. Now, Georgia is sixteenth. In 2001, the System's two-year colleges ranked fifth among the SREB states, but now, it ranks thirteenth. So, despite the tuition increases the System has had in recent years, its rate of increase has been much lower than in other states. For 2006, the staff were recommending a $135 (8%) per semester increase in the tuition rate for research universities, $58 (6.5%) per semester for regional and state universities, and $37 (5%) for two-year colleges. Two exceptions were Georgia College & State University ("GCSU") and Southern Polytechnic State University ("SPSU"), where there are different tuition rates based upon the institutions' unique missions. Mr. Bowes noted that out-of-state tuition remains approximately four times the in-state tuition rate. Graduate tuition rates also remain approximately 20% higher than the undergraduate rates. Also, each year, the staff receive requests from the institutions to have nationally competitive graduate and professional programs to have tuition rates that are competitive with peer programs across the country. The staff consider the market rates of these programs and were making a number of recommendations, as listed in Item 2 of the Committee agenda. The tuition increases proposed will generate an additional $43.7 million, raising the total projected revenues for the System to $709 million in fiscal year 2006.

Mr. Bowes then discussed mandatory student fees. He reiterated that the staff have a fairly rigorous selection process. They limit increases to the critical needs that have been identified by institutions. They have not expanded greatly the number of new programs. They review each of the requests in terms of Board policy, which requires that there be student participation in the student fee process. He noted that this year, the staff had invited institutions to come forward and request increases for technology fees, which have been essentially unchanged since 1999, when they were first established as a pilot program at four institutions. The staff have kept the technology fee rates capped at $75 per semester for research universities and $38 per semester at all other institutions. Last year, at the Chancellor's direction, the staff started to look into this issue. They did a survey of other states to see how they were handling technology fees, and they found two very important things. First, the average technology fee in the University System of Georgia is far below the national average of $200 per year and up. Secondly, the staff found no other state that had a tiered structure for technology fees. Instead, technology fees were treated like other mandatory student fees in that the rate was a function of how many students were paying the fee, the kind of institution, and the particular needs of the institution. So, this year, the staff asked the institutions to come forward with proposed increases in technology fees. They also asked for a lot more information from institutions as to how these fees are being used. They discussed the matter at length at the budget conferences, and the institutions involved the students in the fee-setting process. There were 14 requests for technology fee increases, and the staff were recommending all of them, though 4 were being recommended at a slightly reduced level. Overall, there were 61 student fee requests. Of these, 34 were being recommended to the Board at the requested levels and 22 at reduced levels. Five were not being recommended. The recommendations result in a rise in fee rates of about 7%.

Mr. Bowes reported that the staff were recommending a 2% average merit-based salary increase for fiscal year 2006, which was approved by the Governor and General Assembly. That increase will become effective January 1, 2006. The merit-based increases will be distributed at rates between 0% and 5%, and the staff were requesting written justification for requests above 5%. The staff had also provided an allowance for institutions to address issues of salary equity or salary depression. Mr. Bowes then called upon the Vice Chancellor for Facilities, Linda M. Daniels, to discuss the capital budget.

Ms. Daniels stated that the capital budget was comprised of line items that were included in the materials that had been distributed to the Regents. She wanted to make three major points in an overview of the capital budget recommendations. First, under the fiscal year 2005 amended budget, the System received design funds for four major capital outlay projects. She noted that these were for the fifth through eighth projects on the Regents' major capital outlay projects list. At the point in time when the amended budget was approved, the Governor's recommendation still included construction funding for the first four projects on the list.

Second, Ms. Daniels reported that the University System of Georgia is known for using bond financing wisely; that is, to act efficiently and quickly on the spend-down of the bonds to get facilities built. However, with the new phenomenon of reauthorization and deauthorization of projects, the staff is having to include increased waiting time in some of the strategies for moving forward quickly with projects. The staff are consulting with the institutions to figure out a way to be proactive about this.

Third, Ms. Daniels showed the Regents a slide depicting the four projects for which the System had been provided design funds. She noted that in the previous year, the System did not receive any design funds, though the staff wanted to move forward expeditiously with a fast-track construction management approach. Those project have been front-end funded either through the revolving funds or by the institutions to get them jump-started, and the institutions will be able to use these design funds to keep the projects going, but unfortunately, the new facilities will not be constructed as soon as the institutions had envisioned. The System received equipment funds and minor capital projects funds. With regard to major repairs and renovations ("MRR"), the System received $50 million. Ms. Daniels noted that the formula funding request was $65 million and that the staff are hoping the Governor will consider a $15 million adjustment to the existing allocation. The Board is very cognizant of the importance of maintaining existing facilities. All presidents agree that solid MRR funding is critical in this regard. In closing, Ms. Daniels said that in light of the fiscal constraints of the state, the staff were very grateful for the capital funding that had been allocated to the System by the state.

Mr. Bowes said that this concluded the budget presentation and asked whether the Regents had any questions or comments.

Regent NeSmith stated that even if the Board approved the tuition rate increases, the University System of Georgia would still be well below the median tuition rate nationally.

Mr. Bowes concurred and noted that the median is about $4,000 per year, while the System average is about $1,100 below that figure.

Chair Pittard agreed that there was certainly room for more aggressive tuition increases. He said that the Board of Regents owes the citizens of the State of Georgia a strong four- to five-year plan to bring tuition more in line with the national median. However, one reason that tuition in the University System of Georgia is more modest than in other states is because the State of Georgia has been more supportive of higher education than other states. While the System only receives about one-third of its operating expenses from the state, there are many public higher education systems who receive considerably less state funding. Compared to some neighboring states, Georgia was not hit as hard in recent years in terms of budget cuts. He stated that the System and the students will have to be increasingly responsible for the cost of higher education in the future and that there would be no leveling off of tuition rates in the near future. Chair Pittard noted that the budget process is essentially three different pieces: enrollment, physical plant, and fringe benefits. All (100%) of state funding for physical plant and fringe benefits is passed on to the institutions. Meanwhile, 80% of enrollment funding is passed on to the institutions, while 20% is discretionary. In the past, that meant that some institutions got more or less than 100% of that funding based upon their specific needs that year. This year, however, was less discretionary because the System is catching up from the past several years of budget cuts, particularly the midyear budget cut in fiscal year 2005. He stated that the legislature had been generous to the University System of Georgia and that the proposed budget was reasonable. He then asked for a motion to approve the first four action items on the agenda of the Committee on Finance and Business Operations: fiscal year 2006 budget allocations (Item 1, pages 25 to 29), fiscal year 2006 tuition (Item 2, pages 29 to 31), fiscal year 2006 mandatory student fees (Item 3, pages 31 to 33), and fiscal year 2006 salary and wage administration policy (Item 4, page 33).

Regent Leebern made a motion to approve these agenda items. The motion was seconded by Regent NeSmith and unanimously adopted by the Board of Regents.

Chair Pittard asked Mr. Bowes to next discuss the fiscal year 2005 amended budget.

Mr. Bowes stated that the staff were recommending the allocation of the fiscal year 2005 amended budget, which had been provided to the Regents. He noted that the amended budget included $9.4 million in lapsed project funds. The amended budget also included $4.4 million to correct an error in the payroll shift reduction that occurred for the Georgia Tech Research Institute ("GTRI"). He noted that GTRI is a "B" unit, which means that it is a line item in the budget. Therefore, there was funding in the fiscal year 2006 budget to fix this error permanently going forward. Also in the amended budget, $1.6 million is provided for retirees of the Cooperative Extension Service at UGA as well as the transfer of $2.1 million from the budget of the Cooperative Extension Service to the budget of UGA to deal with this issue going forward. Mr. Bowes said that these were the highlights of the fiscal year 2006 amended budget and that he would be happy to answer any questions.

Chair Pittard asked for a motion to approve the fiscal year 2005 amended budget (Item 5, pages 33 to 34). Motion properly made, seconded, and unanimously adopted, the Board approved this item. Seeing that there were no further items to come before the Committee on Finance and Business Operations as a Committee of the Whole, Chair Pittard adjourned the meeting and turned the Chairmanship of the meeting back over to Chair Wooten.

At approximately 2:35 p.m., Chair Wooten adjourned the Regents into the regular meeting of the Committee on Finance and Business Operations.

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CALL TO ORDER

The Board of Regents of the University System of Georgia met again on Wednesday, April 20, 2005, in the board room of the Armstrong Center Technology Conference Center at Armstrong Atlantic State University. The Chair of the Board, Regent Joel O. Wooten, Jr., called the meeting to order at 9:00 a.m. Present on Wednesday, in addition to Chair Wooten, were Vice Chair J. Timothy Shelnut and Regents Hugh A. Carter, Jr., Connie Cater, William H. Cleveland, Julie Hunt, W. Mansfield Jennings, Jr., James R. Jolly, Donald M. Leebern, Jr., Elridge W. McMillan, Martin W. NeSmith, Doreen Stiles Poitevint, Richard L. Tucker, and Allan Vigil.

INVOCATION

The invocation was given on Wednesday, April 20, 2005, by Richard L. Tucker.

ATTENDANCE REPORT

The attendance report was read on Wednesday, April 20, 2005, by Secretary Gail S. Weber, who announced that Regents Michael J. Coles, Joe Frank Harris, and Wanda Yancey Rodwell had asked for and been given permission to be absent on that day. Regent Patrick S. Pittard was attending the meeting via conference call.

Chair Wooten thanked President Thomas Z. Jones, and his wife, Joyce; the administrators, faculty, staff, and students of Armstrong Atlantic State University ("AASU"); and the Savannah community for their hospitality extended to the Regents at this meeting. He said that being on the campus adds so much to the Board's understanding of AASU's successes and challenges. The AASU community had treated the Regents like royalty. The social events had given the Regents the opportunity to meet everyone, and they had enjoyed the events very much. On behalf of the Board of Regents, Chair Wooten thanked everyone involved in the planning of this meeting.

At approximately 9:05 a.m., Chair Wooten adjourned the Regents for consecutive meetings of the Committee on Academic Affairs, Committee on Information and Instructional Technology, and Committee on Real Estate and Facilities. After these Committee meetings, at approximately 10:00 a.m., Chair Wooten reconvened the meeting of the full Board and called for the Committee reports.

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COMMITTEE ON ORGANIZATION AND LAW

The Committee on Organization and Law met on Tuesday, April 19, 2005, at approximately 9:15 a.m. in the conference room of the Armstrong Center Technology Conference Center at Armstrong Atlantic State University. Committee members in attendance were Chair James R. Jolly and Regents Connie Cater, W. Mansfield Jennings, Jr., Doreen Stiles Poitevint, and Richard L. Tucker. Also in attendance were the Senior Vice Chancellor for Support Services, Corlis Cummings; the Associate Vice Chancellor for Legal Affairs, Elizabeth E. Neely; and the Assistant Vice Chancellor for Legal Affairs (Prevention), J. Burns Newsome. Chair Jolly reported to the Board on Wednesday that the Committee had reviewed three items, all of which required action. Item 1 included 16 applications for review; 12 of these were denied, 1 was continued for further consideration, 1 was withdrawn at the appellant's request, and 2 were referred to the Office of State Administrative Hearings. In accordance with H.B. 278, Section 3 (Amending O.C.G.A. § 50-14-4), an affidavit regarding this Executive Session is on file with the Chancellor's Office. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Applications for Review

In the matter of file no. 1743 at the University of West Georgia ("UWG"), concerning alleged violation of UWG's Student Code of Conduct (Sections 1.00 and 4.02), the application for review was denied.
In the matter of Chief Stokes at Savannah State University, concerning disciplinary actions taken against him and findings in a case involving Ms. Shannon Holman, the application for review was denied.
In the matter of Patricia Jordan at the Georgia Institute of Technology, concerning termination of employment, the application for review was denied.
In the matter of file no. 1746 at the University of Georgia, concerning scholastic dismissal, the application for review was denied.
In the matter of Linda Hodge at the Georgia Institute of Technology, concerning demotion due to fiscal cutbacks, the application for review was denied.
In the matter of Dr. Modibo Kadalie at Savannah State University, concerning denial of a leave of absence to attend a fellowship program in South Africa, the application for review was continued for further consideration.
In the matter of Dr. Obioma Iheduru at Fort Valley State University, concerning an imposition of sanctions for an alleged violation of sexual harassment policies, the application for review was denied.
In the matter of Stanley Phillip Brown, Jr. at Fort Valley State University, concerning termination as a result of alleged job abandonment, the Committee recommended referral to the Office of State Administrative Hearings.
In the matter of John Kwesi DeGraft-Hanson at the University of Georgia, concerning nonpromotion and tenure, the application for review was denied.
In the matter of LaToya M. Haynes at the Medical College of Georgia, concerning termination, the Committee recommended referral to the Office of State Administrative Hearings.
In the matter of file no. 1751 at the University of Georgia, concerning reclassification matters, the application for review was denied.
In the matter of Harriette Haynes at Albany State University ("ALSU"), concerning termination from her position as Associate Vice President for Information Technology and Chief Information Officer of ALSU, the application for review was denied.
In the matter of Paul Nelson, a former employee of the University of Georgia ("UGA"), concerning discharge from UGA's School of Veterinary Medicine teaching hospital, the application for review was denied.
In the matter of file no. 1754 at Kennesaw State University, concerning financial aid matters, the application for review was denied.
In the matter of file no. 1755 at Savannah State University, concerning indefinite suspension, the application for review was withdrawn at the appellant's request.
In the matter of Dr. Barbara D. Holmes at Albany State University, concerning nonrenewal and alleged violations of Board of Regents policies, the application for review was denied.

2. Approval of the Georgia College & State University Mutual Aid Agreement With the City of Milledgeville

Approved: The Board approved the following mutual aid agreement between Georgia College & State University ("GCSU") and the City of Milledgeville, effective April 20, 2005.

Background: GCSU has reached an agreement with the City of Milledgeville to provide for the rendering of extraterritorial assistance as defined in Georgia Code 36-69-2 (local emergency) and under the conditions established in Georgia Code 36-69-2 (exterritorial cooperation and assistance to local law enforcement agencies or fire departments; commander of operations). The mutual aid agreement follows a statutory format and has been approved by the Office of Legal Affairs.

3. Approval of the Georgia College & State University Mutual Aid Agreement With Baldwin County

Approved: The Board approved the following mutual aid agreement between Georgia College & State University ("GCSU") and Baldwin County, effective April 20, 2005.

Background: GCSU has reached an agreement with Baldwin County to provide for the rendering of extraterritorial assistance as defined in Georgia Code 36-69-2 (local emergency) and under the conditions established in Georgia Code 36-69-2 (exterritorial cooperation and assistance to local law enforcement agencies or fire departments; commander of operations). The mutual aid agreement follows a statutory format and has been approved by the Office of Legal Affairs.

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AUDIT COMMITTEE

The Audit Committee met on Tuesday, April 19, 2005, at approximately 11:05 a.m. in the board room of the Armstrong Center Technology Conference Center at Armstrong Atlantic State University. Committee members in attendance were Chair Connie Cater, Vice Chair W. Mansfield Jennings, Jr., and Regents Julie Hunt, James R. Jolly, Martin W. NeSmith, Richard L. Tucker, and Allan Vigil. Regent Hugh A. Carter, Jr. was also in attendance. Chair Cater 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: Update on Corrective Action Plan for Albany State University

At the May 2004 Audit Committee meeting, the Associate Vice Chancellor for Internal Audit, Ronald B. Stark, presented the fiscal year 2003 audit ratings of the System institutions that are audited by the State Department of Audits and Accounts. The Committee requested that the presidents, chief business officers, and campus-based auditors from the institutions that received a Code 5 rating present their action plans to improve their audit results. (A Code 5 rating is the worst possible audit rating, indicating several significant observations or one or more major observations, significant risk for noncompliance with regulations, and/or serious violation of laws, etc.) Therefore, at the June 2004 Audit Committee meeting, the Committee received a report from President Portia H. Shields and other representatives from Albany State University ("ALSU") regarding their corrective action plan to improve ALSU's audit rating.

At the November 2004 meeting, ALSU's Vice President for Fiscal Affairs, Stanley L. Williams, and Director of Internal Audits, Carl E. Threatt, Jr., updated the Committee on their corrective action plan for improvement. At this meeting Mr. Williams, and the Associate Vice President for Fiscal Affairs, Diann Moffett, accompanied President Portia H. Shields, who gave a further update on the institution's corrective action plan. President Shields reported that all of the audit findings had been resolved or are in the process of being resolved. Middle management positions in the Division of Fiscal Affairs have been filled, enhancing the division's efficiency and accountability. The Financial Operations Department has been reorganized to enhance workflow, internal controls, and accountability. Staff developed month-end and year-end task lists in order to ensure that accounting periods will be closed by required deadline dates. They also prepared bank reconciliations throughout fiscal year 2005. Capital assets balances are correctly recorded and depreciated, and the ALSU's capital ledger is in balance with the University System data warehouse. Staff analyzed and reconciled restricted account balances, and made corrected journal entries to the accounting records. They also implemented additional exception reporting to further enhance monitoring of students' eligibility for financial aid and cost of attendance budget calculations. In closing, President Shields commended Mr. Williams and Ms. Moffett for their tireless work to rectify the audit results at ALSU.

2. Information Item: Fiscal Year-End 2004 Financial Audit Ratings

Annually, the Associate Vice Chancellor for Internal Audit, Ronald B. Stark, evaluates audit findings and reports the overall results of each institution's audit. The process rates each audit completed by the State Department of Audits and Accounts a Code 1 through a Code 5 rating. Mr. Stark presented the institutional audit ratings at this meeting. He reported that there has been a trend of tremendous improvement in recent years. In fiscal year 2002, there were 164 audit findings. In fiscal year 2003, there were 125 audit findings, and in fiscal year 2004, there were only 77. Moreover, the percentage of System institutions having a Code 1 rating, the best possible audit rating, has increased from 19% to 72% in the same time period. Mr. Stark said that the System has improved greatly overall and that he expects even more improvement in the current fiscal year.

Chair Cater commended Mr. Stark for the significant improvement in audit ratings during his tenure with the University System Office and said that he looks forward to continued audit improvements in the System.

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EXECUTIVE AND COMPENSATION COMMITTEE

The Executive and Compensation Committee met on Tuesday, April 19, 2005, at approximately 10:30 a.m. in the conference room of the Armstrong Center Technology Conference Center at Armstrong Atlantic State University. Committee members in attendance were Chair Joel O. Wooten, Jr., Vice Chair J. Timothy Shelnut, and Regents Donald M. Leebern, Jr., Elridge W. McMillan, Patrick S. Pittard, and Doreen Stiles Poitevint. Chancellor Thomas C. Meredith was also in attendance. Chair Wooten reported to the Board on Wednesday that the Committee had reviewed one item, which did not require action. That item was as follows:

1. Information Item: Future Issues

The Chancellor provided information that 64 of 65 memoranda of understanding regarding university foundations had been signed. He also reported that a task force would be formed in the near future to address revision of the budget formula. Finally, the Chancellor reported that the Governor planned to establish an ad hoc committee regarding Senate Bill 250, which pertains to public-private partnerships and facilities.

At approximately 10:35 a.m. on Tuesday, April 19, 2005, Chair Wooten called for an Executive Session for the purpose of discussing personnel and compensation issues. With motion properly made and variously seconded, the Regents who were present voted unanimously to go into Executive Session. Those Regents were as follows: Chair Joel O. Wooten, Jr., Vice Chair J. Timothy Shelnut, and Regents Donald M. Leebern, Jr., Elridge W. McMillan, Patrick S. Pittard, and Doreen Stiles Poitevint. Also in attendance were Chancellor Thomas C. Meredith; the Secretary to the Board, Gail S. Weber; and the Senior Vice Chancellor for Support Services, Corlis Cummings. In accordance with H.B. 278, Section 3 (amending O.C.G.A. § 50-14-4), an affidavit regarding this Executive Session is on file with the Chancellor's Office.

At approximately 11:45 a.m., Chair Wooten reconvened the Committee meeting in its regular session and announced that no actions had been taken in Executive Session.

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COMMITTEE ON FINANCE AND BUSINESS OPERATIONS

The Committee on Finance and Business Operations met as a Committee of the Whole during the full Board meeting on April 19, 2005. Committee members in attendance were Chair Patrick S. Pittard, Vice Chair Hugh A. Carter, Jr., and Regents James R. Jolly, Donald M. Leebern, Jr., Doreen Stiles Poitevint, and J. Timothy Shelnut. Also in attendance were Chancellor Thomas C. Meredith, Board Chair Joel O. Wooten, Jr., and Regents Connie Cater, Julie Hunt, W. Mansfield Jennings, Jr., Elridge W. McMillan, Martin W. NeSmith, Richard L. Tucker, and Allan Vigil. The Committee met in its regular session immediately following its meeting as a Committee of the Whole at approximately 2:35 p.m. with the same attendance. Committee Vice Chair Carter reported to the Board on Wednesday that the Committee had reviewed nine items, all of which required action. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Fiscal Year 2006 Budget Allocations

Approved: The Board approved the allocation of state appropriations for fiscal year 2006 among the 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 10 to 17.)

Background: After three years of budget cuts, the State of Georgia appears to have turned the corner economically. The budget for the University System of Georgia for fiscal year 2006 begins to address budget cuts of recent years and allows the System to move forward with many important initiatives. The state budget restores the University System of Georgia's share of funding to 11.5%, which is an important change and reflects recognition by the System's funding partners of the critical role the System plays in the education of its citizens as well as its contribution to the state economy.

The total state appropriations approved by the General Assembly for current University System of Georgia operations, including institutions and other organized activities, is $1.8 billion, an increase of 8.5%, or $140.7 million, over fiscal year 2005 appropriations. Appropriations for University System institutions are $1.59 billion, including $29.8 million in funds for special funding initiatives.

Other organized activities ("B" budget unit and nonteaching "A" budget activities and the Research Consortium), including, for example, the Georgia Tech Research Institute, the Agricultural Experiment Station, the Cooperative Extension Service, the University System Office, and the Georgia Public Library Service, and line item A units received $213.9 million in state appropriations, an increase of $1.8 million, or just under 1% above current funding levels.

The fiscal year 2006 approved budget for the University System of Georgia includes the following major components:

$17 million is included to provide merit-based salary increases averaging approximately 2%. The increases for both faculty and staff will become effective January 1, 2006.
$103.4 million is included for formula-related increases. The formula comprises the major component of new state appropriations approved by the Governor and General Assembly for the University System of Georgia and includes $90.4 million for enrollment-related increases; $7.7 million is for operation and maintenance of new facilities; and $5.3 million is for new System retirees.
An additional $5 million has been provided to assist the Medical College of Georgia in achieving its goal to become a premier teaching hospital and research institution.
Funding in the amount of $375,000 was approved for continuation the Georgia Academy of Mathematics, Engineering, and Science ("GAMES") program at Middle Georgia College, and $450,000 was approved to maintain funding support for the Georgia Leadership Institute for School Improvement.
Transfer of $2.3 million of Georgia Tech Regional Engineering Program ("GTREP") funding and $1.8 million in funding for the Georgia Southern University information technology initiative to the formula.

Capital Funding

The Governor's budget recommendations provided design and construction funding for the four top projects on the Board of Regents major capital projects priority list. These projects include renovation of facilities at Georgia College & State University for Nursing and Health Science programs; the Health, Wellness and Lifelong Learning Center at the University of West Georgia; the Library and Technology Center at North Georgia College & State University; and the Academic Classroom Building at Savannah State University. The fiscal year 2006 final budget provides design funds only for those projects in the total amount of $7,023,500. Funding for the major repair and renovation ("MRR") fund was reduced from the formula amount of $65 million to $50.6 million to be funded with bond proceeds.

Additional major changes for fiscal year 2006 include the following:

Ten minor capital projects at Georgia Southern University, Waycross College, the Georgia Institute of Technology, Kennesaw State University, the Medical College of Georgia, Gainesville College, Gwinnett University Center, East Georgia College, Dalton State College, and Armstrong Atlantic State University ($38,850,000).
Funding for the Nanotechnology Project at the Georgia Institute of Technology ($5,000,000).
Equipment funding for major capital projects at Kennesaw State University, Georgia Perimeter College, and the University of Georgia ($3,895,000).
Funding for five Georgia Public Library Service projects ($7,880,000).

In addition, actions by the General Assembly included additions of major capital projects in the fiscal year 2005 amended budget and changes to projects previously approved in fiscal year 2005 but deferred by the Governor. These changes include the following:

Fiscal Year 2005 Amended Budget: Design funds for four major capital projects at Macon State College (Professional Sciences Center), Fort Valley State University (Academic Classroom Building), Georgia State University (Teaching Laboratory Building), and the University of Georgia (College of Pharmacy). Total funding provided is $6, 195,000.
Reauthorization of Deferred Projects: Funding for projects at South Georgia College (rehab of Davis Hall and equipment), Gordon College (Success and Retention Center), and Southern Polytechnic State University (minor capital project). Total funding provided is $7,777,000.
Deauthorization of Deferred Projects: Savannah State University (renovation of Hill Hall), University of West Georgia (infrastructure for campus expansion), and Georgia Southwestern State University (Wheatley Hall). Total funding deauthorized is $6,150,000.

The net increase in capital funding based upon actions during the 2005 legislative session is $133,500,500.

Allocation Process and Strategy

In March 2005, key administrators among the academic and fiscal affairs staff held budget conferences with each institutional president and his/her senior administrators. The purpose of the conferences was to discuss the Governor's budget recommendations and actions by the General Assembly on the budget, particularly as they concerned issues of formula funding and proposed budget reductions. The conferences also focused on key institutional priorities and needs, institutional enrollment trends, tuition strategies, and mandatory and elective student fee requests, with special emphasis on proposed changes to institutional technology fees. Additionally, prior to the development of final allocation recommendations, staff consulted with the Chair of the Board of Regents, the Chair of the Committee on Finance and Business Operations, and other members of the Board.

The budget allocations for fiscal year 2006 are based upon the following strategy:

A minimum 80% of formula growth funds are allocated to institutions (about $72.3 million) as in the past. However:
- $34.3 million is distributed on the basis of institutional share of state budget to partially offset loss from midyear budget cut of $64.8 million.
- The balance of approximately $38 million will be distributed based upon enrollment growth as generated under the formula.
(Note: In August 2004, the Governor announced that $68 million in funds originally intended to support a shift of the June 30, 2005, payroll from fiscal year 2005 to fiscal year 2006 would now simply be cut from fiscal year 2005 appropriations. The Board of Regents responded to this by adopting a plan, in concurrence with the Governor, to use $27.7 million from health insurance reserves and $9.4 million from lapsed project funds to support $36.1 million of the budget reduction. The $36.1 million becomes a permanent cut to System institution and agency budgets in fiscal year 2006. The balance of the cut ' about $38 million ' was absorbed by institutions based upon their share of the total state appropriations to the University System of Georgia and also becomes a permanent budget reduction.)
Funds for physical plant growth increases in square footage are allocated to institutions based upon the formula ($7.7 million).
Fiscal year 2005 salary annualizer funds ($12.3 million) are allocated on the basis of actual need.
Fiscal year 2006 salary increase funds ($16.1 million) are allocated on the basis of actual need.
Fiscal year 2006 retiree benefit funds ($5.3 million) are allocated on the basis of actual need.
20% of new formula funds ($18.2 million) plus other prior year funds ($2.2 million) are allocated:
- To partially offset major losses to institutions by the change in the allocation strategy ($6.8 million),
- To fund start-up of the state college in Gwinnett County ($1.6 million),
- To fund major strategic priorities of the System and institutions as they relate to instructional programs ($7.8 million), and
- To assist the Office of Information and Instructional Technology and the University System Office with loss of technology funds supported by lottery monies and to meet ongoing needs ($4.2 million).

In summary, 96% of new formula funds are allocated to System institutions under these recommendations. Appendices I A-D summarize the fiscal year 2006 budget for the University System of Georgia and the allocation recommendations for teaching institutions and other organized activities.

2. Fiscal Year 2006 Tuition

Approved: The Board approved the tuition rates and policy adjustments for fiscal year 2006 to become effective in the fall semester 2005.

This item was discussed in full by the Committee on Finance and Business Operations as a Committee of the Whole. (See pages 10 to 17.)

Background:

Undergraduate and Graduate Tuition

Under the recommendations outlined in Appendix II, tuition rates for resident undergraduate students at System research universities increase from $1,684 per semester to $1,819 per semester, a dollar increase of $135 per semester. Tuition rates for resident undergraduate students at System four-year regional and state universities increase from $1,161 per semester to $1,219 per semester, a dollar increase of $58 per semester. At System two-year colleges, tuition rates for resident students increase from $734 per semester to $771 per semester, a dollar increase of $37 per semester.

Tuition rates for resident undergraduate students at Georgia College & State University increase from $1,576 per semester to $1,702 per semester. At Southern Polytechnic State University, tuition rates for resident undergraduate students increase from $1,214 per semester to $1,311 per semester. Tuition rates for these institutions were adjusted in recent years to reflect their unique missions among the System four-year regional and state universities. The percentage increase for both institutions, however, matches that for all System two-year and four-year regional and state universities.

The increases will aid System institutions in meeting costs associated with increasing enrollments and help retain the achievements in quality that have been gained over the last several years. Although the fiscal year 2006 budget includes formula funds for enrollment increases, budget reductions of recent years have left System institutions at funding levels significantly below those of four years ago, based on dollars per full-time equivalent ("FTE") student. Notwithstanding the recommended tuition rate increases, the University System of Georgia continues to be an exceptionally good bargain for students, offering educational opportunities at nationally recognized institutions at tuition costs that are far below national and regional averages. In 2005, the University of Georgia ranked thirty-ninth in the nation in tuition and mandatory fees for comparable public universities. The University System's four-year regional and comprehensive state colleges and universities and its two year colleges ranked forty-first in the nation in tuition and mandatory fees. In the Southern Regional Education Board ("SREB"), an organization comprising 16 states from Texas to Delaware, the University of Georgia ranks sixteenth, while the System's four-year and two- year institutions rank sixteenth and thirteenth, respectively.

Graduate tuition rates, excluding select graduate and professional programs, are set by Board policy at a level 20% above undergraduate tuition rates. Nonresident tuition rates are established also by Board policy at a level representing at least four times the resident student tuition rates.

Graduate and Professional Program Tuition

Board policy authorizes institutions to request approval for separate tuition rate adjustments for select nationally competitive graduate and professional programs. The purpose of the policy is to provide additional funds for program enhancements to enable programs to remain competitive with peer programs in colleges and universities across the country. This year, 12 requests to increase or establish new tuition rates were submitted. The recommendations supported all requests with the only modification being for the graduate nursing program rates requested by the Medical College of Georgia. The programs are listed below.

Georgia State University
Executive Master of Business Administration ("M.B.A.") program
Doctor of Physical Therapy ("D.P.T.")

Medical College of Georgia
    School of Medicine
    School of Nursing
    Master of Physician Assistant (new program)

University of Georgia
    School of Law
    Doctor of Veterinary Medicine
    M.B.A.
    Master of Accountancy
    Master of Public Health

Kennesaw State University
M.B.A. for Experienced Professionals
Master of Science in Conflict Management

3. Fiscal Year 2006 Mandatory Student Fees

Approved: The Board approved increases and/or adjustments in mandatory student fees for various institutions 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 10 to 17.)

Background:

In support of their requests to increase mandatory fees, System institutions are required to submit financial statements and supporting materials to document need. The fee review process carefully considers those requests that meet minimum submission criteria, provide full explanation of all costs and revenues, and meet business plan objectives. Additionally, and in accordance with Board policy, each institution must demonstrate that fee increase requests have been reviewed by a committee comprised of at least 50% student representatives appointed by the student government association.

Sixty-one requests for increases in technology fees, athletic fees, student activity fees, student health fees, parking, and other mandatory were submitted. The recommendations contained in Appendix III propose that 34 of these requests be approved as submitted and 22 be approved at reduced levels. Five requests are not recommended for approval.

Of note this year are recommendations to increase technology fees at several System institutions. Technology fees were first established in the University System of Georgia in 1999 on a pilot basis for four institutions. Following an evaluation of those pilot programs, the concept was extended to all System institutions to help support academic technology needs. Under criteria created for the program, institutions were required to demonstrate not only that the use of funds provides direct benefits to students, but also that students played a significant role in the fee setting process and the determination of how funds would be expended. Technology fee revenues cannot be used for general infrastructure needs nor to support administrative systems.

In 1999, technology fees were capped at $75 per semester for the four System research universities and at $38 per semester for all other System institutions. Technology fee rates have been virtually unchanged in the last six years. The only institutions to receive approval for rate changes since 1999 have been those that established their initial fee rates at levels below the caps. During the last year, Board of Regents staff conducted a survey of technology fees charged at other public colleges and universities across the nation. Several findings emerged from this survey. First, the fees charged at University System of Georgia institutions are on average below rates charged at institutions of similar size and mission. Second, there is wide variation within states regarding the technology fee structures. No other state that responded to the survey indicated a tiered structure such for technology fees such as has existed in Georgia since 1999. Generally, rates were established according to institutional needs and, in most cases, with the support of students.

This year, 14 institutions requested increases in technology fees beyond current caps. All of these requests had the strong support of students.

Most institutions have established procedures for ensuring student participation that exceed the minimum requirements of the policy on fee committees adopted by the Board of Regents in 2000 as evidenced by the reports submitted to the University System Office staff earlier this year and the discussions that occurred during the budget conferences held with senior institutional staff in March 2005. The recommendations supported ten technology fee increases in full and four at a reduced level.

4. Fiscal Year 2006 Salary and Wage Administration Policy

Approved: The Board approved the fiscal year 2006 salary and wage administration policy for 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 10 to 17.)

Background:

It is Board of Regents policy to provide salary increases to System employees based upon merit determined through performance evaluation processes at all System institutions. The state general funds provide $17 million for salary increases in fiscal year 2006, which allows for an average merit- based salary increase of approximately 2% across the System. The proposed policy allows for distribution of the merit increase in ranges from 0% to 5%, with the requirement that any increase above 5% for any employee will be supported by appropriate documentation. Additionally, the policy allows for institutions needing to make promotions or position reclassifications or to address market issues and issues of salary inequity or compression to make adjustments while requiring that these adjustments be supported by appropriate documentation (e.g., market analysis or internal salary studies).

Salary increases become effective January 1, 2006, for all System employees.

5. Amended Fiscal Year 2005 Budget Allocations

Approved: That the Board approve the allocation of the amended budget for fiscal year 2005 among the 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 10 to 17.)

Background: The fiscal year 2005 amended budget includes a net total of $17.8 million in funding for the University System of Georgia. The supplemental allocations include the following:

Reappropriation of prior year lapsed funds in the amount of $9.4 million to assist the units with the payroll shift reduction for fiscal year 2005. These funds were allocated to various units on the basis of the share of reduction, including $8.6 million for the unit A institutions and $0.8 million for the B units.
Addition of $4.4 million to correct the error in the payroll shift reduction for the Georgia Tech Research Institute.
Allocation of $1.8 million for the Department of Administrative Services unemployment fund distributed to units in accordance with the increase in expenditure.
Elimination of funding for the Governor's deferrals in the original budget for the Center for Civic Participation and Renewal, the Georgia Institute for Community Business Development, and the transfer of a position, all at Georgia State University, in the amount of $431,889.
Provision of additional funding of $1.6 million for retirees of the Cooperative Extension Services at the University of Georgia, along with the transfer of $2.1 million from Cooperative Extension Services for the same purpose.
Funding in the amount of $93,870 to offset the loss of tuition revenue from cadets being deployed to active duty at North Georgia College & State University and $471,440 for the Georgia Military College.
Transfer of the bamboo farm from the University of Georgia A budget to the Agricultural Experiment Station B budget in the amount of $180,000.
Increase of $175,000 for the Carl Vinson Institute of Government.

The total allocations are $13.8 million for the A budget and $4 million for the B budget.

6. Approval of Changes to the Pooled Investment Fund Guidelines and Revision of The Policy Manual, Section 705.02, Investments

Approved: The Board approved the addition of a diversified fund to the pooled investment funds.

Background: The pooled investment fund program was created in 1991 by the Board of Regents. The four investment options have remained the same since inception. These include the total return fund, balanced income fund, short-term fund, and legal fund.

The National Association of College and University Business Officers has released data demonstrating that educational institutions of all sizes are more fully diversifying their endowments to achieve more consistent returns with less downside risk. The addition of the diversified fund would provide an additional investment option for University System institutions. By utilizing alternative asset classes, the new fund would seek to gain further diversification. The primary strategy for investing in these asset classes is to increase exposure to assets that have lower correlation to equity and bond markets with the overall character being one of above-average quality and a moderate degree of investment risk. The diversified fund is constructed to build an optimal portfolio where return is increased and risk is reduced. Currently, 28 institutions participate in the pooled investment fund in some way. Participation in this new fund is optional for the institutions as is the case with the other four funds.

Further Approved: The Board also revised The Policy Manual, Section 705.02, Investments.

Background: During the review of the investment policy, it was noted that the current Board of Regents policy includes language not required by the state, which causes an inconsistency with state guidelines and places unnecessary restrictions on the Board's investment options. It is recommended that this language be deleted

The approved revision to Section 705.02, Investments, affords consistency with state guidelines and offers the opportunity to expand the investment options.

Approved revisions are as follows. Please note that the strike-through texts represent deletions from the current version.

Revised Policy

705.02 INVESTMENTS

General: It is the intent of the Board that each institution develop an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility each institution has to the citizens of Georgia and which conforms with Board of Regents investment policy. Each institution shall be required to have a written investment policy statement on file with the Vice Chancellor for Fiscal Affairs and Treasurer. The policy should be reviewed and updated at least once every two years. Each institution shall submit an annual report on its investment performance to the Vice Chancellor for Fiscal Affairs and Treasurer which asserts that investments have been made in accordance with the institution's written investment policy.

Investment Objectives: The investment policy should specify overall investment objectives. There may be several different investment objectives depending on the type of funds to be invested and period of investment to be considered. These may include objectives which attempt to preserve the purchasing power of income and principal, maximize current income, or maximize capital values. Each investment objective should clearly state the time horizon for achieving investment objectives.

Investment Type: The investment policy should identify the general type of investments permitted under each investment objective. Investment must be consistent with donor intent, Board of Regents policy, and applicable federal and state laws. Under Georgia Code Sections 50-17-59 and 50-17- 63, investment of state funds is restricted to direct U.S. Government obligations and obligations of selected U.S. Government agencies. This restriction would not apply to private endowment funds or other non-state fund sources.

Asset Allocation: The investment policy should include asset allocation guidelines which outline the asset classes and subclasses that will constitute permissible areas for investment of funds. The guidelines should indicate the maximum and normal distribution of funds among the different asset classes or subclasses and the rationale for selecting these criteria. Asset allocation guidelines should also be tied to the investment objective and consider the potential risks associated with different asset allocations. The investment policy should outline the factors to be considered when an institution proposed a change in asset allocation such as during times of significant rate shift affecting the investment portfolio and instability in inflationary trends.

Diversification: Diversification is fundamental to the management of risk and is therefore a pervasive consideration in prudent investment management. The investment policy should include a diversification plan that considers the asset classes and investment products to be utilized in an attempt to achieve desired return with an acceptable level of risk.

Spending Policy: The investment policy should include spending rules and relate these to investment objectives. Variables to be considered include the percentage of return allocated to prevent principal erosion by inflation versus the percentage to be expended currently.

Collateralization: The investment policy should provide for appropriate collateralization of invested funds, which, by law, require the pledge of collateral.

Management, Reporting and Monitoring: Management's plan for authorization of investment activity, periodic reporting of investment activity, and monitoring of investment results should be outlined in detail in the investment policy.

Use of Investment Managers: Criteria to be used in the selection of investment managers and the evaluation of their performance should be described if the institution chooses to use outside investment managers. These criteria should address the investment manager's:

Professional background and experience,
Investment philosophy relative to the institution's stated investment objectives,
Organizational structure and overall product line,
Control with respect to ensuring that individual managers adhere to policy objectives and guidelines,
Total size of managed assets,
Record of performance measured against appropriate benchmarks, and
Ability to communicate results effectively and in timely fashion.

7. Revision of The Policy Manual, Section 705.01, Banking

Approved: The Board revised The Policy Manual, Section 705.01, Banking, to allow institutions to competitively bid bank services every five years rather than every three years consistent with terms for other institutional contracts.

Background: The previous policy of requiring each University System institution to determine the bank or banks where its funds are deposited through a best value competitive bid process every three years was approved by the Board in February 1996. Prior to adopting that policy, University System institutions were allowed broad discretion in selecting banks for depositing operating and payroll clearing account funds.

The previous policy, which required each institution to select through a best value competitive bid process every three years the bank or banks with which it deposits funds, was established to bring Board policy into conformance with other policies concerning the acquisition of goods and services by units of the University System. The three-year limit on contracts was burdensome due to the complexity of the relationships System institutions have with their banking institutions. Developments in banking have expanded the variety and improved the efficiency of banking services available in the competitive market, making longer-term contracts a more cost-effective way of conducting business for University System institutions.

The approved revision is as follows. Please note that the strike-through text represents a deletion from the current version and the highlighted text represents the revision.

Revised Policy

705.01 BANKING

All depositories, where funds of the Board of Regents of the University System are held in time deposits, shall either give a depository bond in some acceptable security company qualified to do business in Georgia or, in lieu thereof, may deposit with some other depository satisfactory to the Treasurer of the Board of Regents securities of the following classes, the current market value of which shall be equal to or in excess of the amount of the time deposits:

Direct obligations of the United States Government;
Obligations unconditionally guaranteed by the United States Government;
Direct obligations of the State of Georgia;
Direct obligations of any political subdivision of the State of Georgia;
Georgia municipal, county, or State of Georgia Authority Bonds acceptable to the Treasurer of the Board of Regents (BR Minutes, 1970-71, p. 691).

The president of each institution of the University System shall determine the bank or banks where funds are deposited through a best value competitive contract bid process to be undertaken every ~~three~~ five years. The president shall inform the Vice Chancellor for Fiscal Affairs and Treasurer of the Board of Regents of the bank or banks where funds are deposited. It shall be the duty of the Treasurer of the Board to handle all details relative to the bank or banks furnishing the required depository protection (BR Minutes, 1949-50, p. 251; February 1996).

The Vice Chancellor for Fiscal Affairs and Treasurer of the Board shall appoint a person or persons at each of the institutions of the University System with authority to sign checks drawn on banks where funds of the respective institutions are deposited. Persons so appointed shall be authorized to sign any documents that may be required by the banks concerned (BR Minutes, 1952-53, p. 365).

The chief business officer of each institution of the University System of Georgia and any other officer or employee who participates in the selection of the institution's depository (bank) is prohibited from serving on the governing boards of banks and other financial institutions if such banks or other financial institutions have or seek a commercial relationship with that institution (BR Minutes; 1996). A president of an institution may serve on the governing board of a bank or financial institution that does not have a commercial relationship with the institution. However, such a bank or financial institution will not be considered by the institution for establishment of a commercial relationship with that institution of the University System of Georgia for not less than two years after the termination of the president as a member of the board.

8. Acceptance of Gifts for Valdosta State University

Approved: The Board accepted on behalf of Valdosta State University ("VSU") gifts-in-kind from the following corporation:

Company	Value	Items	Department
Sci-Trek	$300,000	SciTrek 501(c)(3) brand; Work and intellectual properties completed to date on the Communication Knowledge Pavilion Cash award of $150,000 to complete build-out of the Communication Knowledge Pavilion; and, Materials from the Thomas Edison Foundation	College of Education

Background: The receipt of the Science and Technology Museum of Atlanta ("SciTrek") properties resulted from over four months of negotiations and allows VSU to become a center for science education and training. Under the transfer agreement with SciTrek, VSU will receive the foloowing:

All intellectual property related to the business models for creating a technology charter school;
The Center of Innovation (to teach middle school and high school students technical and science skills that can be used to obtain employment should they decide not to pursue college degrees);
The Teacher Resource Center for training science educators from throughout the state how to teach inquiry-based science lessons and support the Georgia Performance Standards. The center would also serve as a facility to teach children hands-on process-oriented science skills or "doing versus viewing"; and
The Knowledge Pavilions (topical learning centers tied to education instruction techniques and the Georgia Performance Standards).

Additionally, VSU also was awarded all of SciTrek's computers, a grant of $150,000 to continue the build-out of the Communications Knowledge Pavilion, support to start outfitting two mobile science education labs and the materials on permanent loan from the Thomas Edison State College Foundation, Inc., including some of Thomas Edison's possessions such as a prototype phonograph, kinetoscope (motion picture viewer), and early fluoroscope (x-ray machine).

Board policy requires that any gift, including declarations of trust, to a University System of Georgia institution with an initial value greater than $100,000 must be accepted by the Board of Regents. VSU has advised that there are no material costs associated with the acceptance of these gifts.

9. Acceptance of Gift for the University of West Georgia

Approved: The Board accepted on behalf of the University of West Georgia ("UWG") $333,000 for the university's National Excellence Fund.

Background: This donation represents the second installment toward a $1 million pledge made by Ms. Alice Richards to establish UWG's National Excellence Fund. The National Excellence Fund is an endowment fund that provides much needed dollars that are not restricted to any particular university program but may be used where the need is greatest. The interest earned each year from the endowment fund will be made available to support programs of excellence at UWG that require funding sources other than tax dollars.

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COMMITTEE ON ACADEMIC AFFAIRS

The Committee on Academic Affairs met on Wednesday, April 20, 2005, at approximately 9:05 a.m. in the board room of the Armstrong Center Technology Conference Center at Armstrong Atlantic State University. Committee members in attendance were Chair William H. Cleveland and Regents Hugh A. Carter, Jr., Martin W. Nesmith, J. Timothy Shelnut, and Allan Vigil. Also in attendance were Chancellor Thomas C. Meredith, Board Chair Joel O. Wooten, Jr., and Regents Connie Cater, Julie Hunt, W. Mansfield Jennings, Jr., James R. Jolly, Donald M. Leebern, Jr., Elridge W. McMillan, Doreen Stiles Poitevint, Richard L. Tucker, and Allan Vigil. Chair Cleveland reported to the Board that the Committee had reviewed 16 items, 13 of which required action. Item 9 included 169 regular faculty appointments, which were reviewed by the Committee Chair and recommended for approval. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Change of Institutional Name Without Changing Institutional Mission or Sector, Floyd College

Approved: The Board approved the request of President John Randolph Pierce that Floyd College ("FC") be authorized to revise its institutional name, effective April 20, 2005.

Abstract: FC requested that the Board of Regents consider a name change of the institution from Floyd College to Georgia Highlands College. The reason for this is straightforward. Since it began operations, FC has occupied a single campus in Floyd County. However, in March 2005, it occupied a second campus in Bartow County. The name "Georgia Highlands College" will accurately reflect both the growth of the institution from one campus to two campuses and the expansion of the institution's service area. All relevant constituencies of the institution have been consulted concerning the proposed name change via campus meetings, town meetings, focus groups, and personal discussions.

No mission or sector change will take place as a result of this action. Costs of the name change will be absorbed by the institution through a combination of state funds and nonstate funds.

2. Clarification of Mission Statement Without Changing Institutional Mission or Sector, Coastal Georgia Community College

Approved: The Board approved the request of President Dorothy L. Lord that Coastal Georgia Community College ("CGCC") be authorized to revise its mission statement, effective April 20, 2005.

Abstract: As a result of the Chancellor's statewide assessment process, the Board's 1996 moratorium on changes in mission and mission statements was lifted at the November 2004 Board meeting.

As part of this process, institutions that wish to make alterations in the wording of their existing mission statement that do not change their current missions in any substantive way have been encouraged to submit them for University System Office review and subsequent action by the Board.

The revision has been reviewed by the University System Office staff, and it neither alters the sector nor the fundamental program level of the institution.

Previous Mission Statement
Coastal Georgia Community College was founded in 1961 by the Regents of the University System of Georgia as a non-residential college to offer pre-baccalaureate degrees. In 1972, the Regents of the University System of Georgia and the State Board of Education agreed to fund jointly a vocational technical division at Brunswick College in order to preclude the necessity of building a separate vocational technical institute. This agreement calls for equal emphasis on career programs and university parallel program. Thus, from 1972 Coastal Georgia Community College began to function as a comprehensive community college to serve the needs of coastal Georgia. In 1986 the Regents authorized the creation of the Brunswick Center to provide baccalaureate and master's degrees in collaboration with other units of the University System.

Coastal Georgia Community College shares with the University System of Georgia the following core characteristics or purposes:

a supportive campus climate, necessary services, and leadership and development opportunities, all to educate the whole person and met the needs of students, faculty and staff;
cultural, ethnic, racial, and gender diversity in the faculty, staff and student body, supported by practices and programs that embody the ideals of an open, democratic, and global society;
technology to advance educational purpose, including instructional technology, student support services, and distance education;
collaborative relationships with other system institutions, state agencies, local schools and technical institutes, and business and industry, sharing physical, human, information, and other resources to expand and enhance programs and services available to the citizens of Georgia.

Coastal Georgia Community College shares with other two-year colleges of the University System of Georgia the following core characteristics or purposes:

a commitment to excellence and responsiveness within a scope of influence defined by the needs of a local area and by particularly outstanding programs or distinctive characteristics that have a magnet effect throughout the region or state;
a commitment to a teaching/learning environment, both inside and outside the classroom that sustains instructional excellence, functions to provide University System access for a diverse student body, and promotes high levels of student learning;
a high quality general education program that supports a variety of well-chosen associate programs and prepares students for transfer to baccalaureate programs, a learning support program designed to insure access and opportunity for a diverse student body, and a limited number of certificate or other career programs to complement neighboring technical institute programs;
a commitment to public service, continuing education, technical assistance, and economic development activities that address the needs, improve the quality of life, and raise the educational level within the college's scope of influence;
a commitment to scholarship and creative work to enhance instructional effectiveness and meet local needs.

As a two-year unit of the University System of Georgia, Coastal Georgia Community College emphasizes teaching and learning in response to the needs of coastal Georgia for academic, technical, and continuing education. Within its historical context, as Coastal Georgia Community College moves into the twenty-first century, the college is committed to enhancing the above core characteristics through emphasizing:

promoting retention and success in college, especially for students in at-risk situations, via an intensive orientation and advisement program;
promoting the development of the whole student through cultural and fine arts programming, leadership training and opportunities on campus, community service activities and health, wellness and recreational opportunities;
a carefully developed plan of activities and services to meet the learning needs of a diverse student body, including minority, non-traditional, disabled and international students;
strengthening resources for teaching and for student use in research and learning;
developing and expanding off-campus centers to provide access for students in coastal communities;
providing a center for on-site access to baccalaureate and master's degree programs in collaboration with other units of the University system;
promoting workforce preparedness by partnerships with business and industry;
developing state-of-the-art instructional and support technology to enhance teaching and learning;
expanding conference services with state-of-the-art training facilities and instruction;
developing and implementing formal activities with area schools;
improving marketing to create awareness of programs and services;
improving aging physical facilities and upgrading equipment;
improving institutional effectiveness by college-wide linking of planning, evaluation and budgeting.

Revised Mission Statement

As a unit of the University System of Georgia and a two-year institution, Coastal Georgia Community College has as its mission to provide pre-baccalaureate programs of study for transfer, to provide preparation for immediate employment in a variety of technical program areas, to provide assistance to students who are academically under-prepared for college level study, and to provide lifelong learning opportunities for workforce development and career enhancement as well as personal development and enrichment. Within the context of this mission, Coastal Georgia Community College places emphasis on the following:

Promoting retention and program completion for all students;
Providing activities and services that meet the learning needs of a diverse student body and that provide learning opportunities outside the classroom for the whole student;
Providing appropriate resources for faculty and student use in support of classroom learning;
Providing instruction and support services at off-campus locations as needed in the service area;
Providing a center for on-campus access to baccalaureate and master's degree programs in collaboration with other institutions of the University System;
Promoting workforce preparedness through partnerships with business and industry and service area K-12 school systems;
Providing and expanding noncredit lifelong learning programs and conference services to meet the needs of the community;
Partnering with area school systems to foster seamless transitions from secondary schools to college; and
Promoting and improving institutional effectiveness through an organized system of planning and assessment.

3. Clarification of Mission Statement Without Changing Institutional Mission or Sector, Armstrong Atlantic State University

Approved: The Board approved the request of President Thomas Z. Jones that Armstrong Atlantic State University ("AASU") be authorized to revise its mission statement, effective April 20, 2005.

Abstract: As a result of the Chancellor's statewide assessment process, the Board's 1996 moratorium on changes in mission and mission statements was lifted at the November 2004 Board meeting.

The revision has been reviewed by the University System Office staff, and it neither alters the sector nor the fundamental program level of the institution.

Previous Mission Statement

Armstrong State College was founded in 1935 as a city college and continues to fulfill an urban mission, teaching a diverse population of traditional and non-traditional students. Throughout its history, Armstrong has shared its creative, scholarly, technical, and leadership expertise with individuals and organizations throughout southeast Georgia. It is a designated Regional Health Professions Education Center. Offering a broad range of programs in arts and sciences, teacher education, health professions, and graduate studies. Armstrong provides all students with a firm foundation in the liberal arts and anchors its academic excellence in its baccalaureate and graduate programs.

Armstrong Atlantic State University shares with other institutions in the University System of Georgia the following common mission:

The mission of the University System of Georgia is to contribute to the educational, cultural, economic, and social advancement of Georgia by providing excellent undergraduate general education and first-rate program leading to associate, baccalaureate, masters, professional, and doctoral degrees; by pursuing leading-edge basic and applied research, scholarly inquiry, and creative endeavors; and by bringing these resources to bear on the economic development of the State and the continuing education of citizens through public service.

While the core teaching, research and scholarship, and service functions differ by institutional type, the campus life of every institution in the University System of Georgia will be characterized by:

a supportive campus climate, necessary services, and leadership and development opportunities, all to educate the whole person and meet the needs of students, faculty, and staff;
cultural, ethnic, racial, and gender diversity in the faculty, staff and student body, supported by practices and programs that embody the ideals of an open, democratic, and global society;
technology to advance educational purposes, including instructional technology, student support service, and distance education;
collaborative relationships with other System institutions, State agencies, local schools and technical institutes, and business and industry, sharing physical, human, information, and other resources to expand and enhance programs and services available to the citizens of Georgia.

Armstrong Atlantic State University shares with the other senior universities of the University System of Georgia the following core characteristics or purposes:

a commitment to excellence and responsiveness within a scope of influence defined by the needs of an area of the state, and by particularly outstanding program or distinctive characteristics that have a magnet effect throughout the region or state;
a commitment to a teaching/learning environment, both inside and outside the classroom, that sustains instructional excellence, serves a diverse and college-prepared student body, promotes high levels of student achievement, offers academic assistance, and provides developmental studies programs for a limited student cohort;
a high quality general education program supporting a variety of disciplinary, interdisciplinary, and professional academic programming at the baccalaureate level, with selected master's and educational specialist degrees, and selected associate degree programs based on area need and/or inter-institutional collaborations;
a commitment to public service, continuing education, technical assistance, and economic development activities that address the needs, improve the quality of life, and raise the educational level within the university's scope of influence;
a commitment to scholarly and creative work to enhance instructional effectiveness and to encourage faculty scholarly pursuits, and a commitment to applied research in selected areas of institutional strength and area need.

The primary mission of Armstrong Atlantic State University is to foster its students' abilities essential to being knowledgeable, thoughtful, responsible, and creative members of society. For its population of traditional and non-traditional students, Armstrong strives to promote academic excellence and provide appropriate access to its programs, including magnet offerings in health professions, teacher education, public history, criminal justice, and transfer programs in engineering studies. Moreover, Armstrong shall:

augment traditional classroom instruction and provide student-centered learning through the integration of new technologies and innovative methods of course delivery;
improve and expand access through distance learning, flexible course scheduling, and development of off-campus sites;
respond to student needs through accessible faculty and administrators, an effective student- teacher ratio, and appropriate learning support;
foster a deepened understanding of diverse world views and experiences through the examination of multicultural and international perspectives across the curriculum, and activities that encourage respect for human worth;
offer activities to students that help to prepare them for the work place or for further study through a wide array of leadership programs, experiential training, and entrepreneurial opportunities;
optimize resources and expand educational opportunities for citizens throughout Georgia through the interchange of faculty and programs and in partnerships with other educational institutions, especially other units of the University System.

In shaping its vision for the twen

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Meeting Minutes - April 2005