The First Plenary Session, meeting at the UNC CH Friday Center, was called to order at 12:45. Thirty-nine delegates were present.

A.    Welcome: Chair Howell welcomed all delegates. Several items were distributed: a survey for delegates to express their opinions about the change in meeting times; a directory of UNC Administration, the Agenda, a list of committee members, a form for delegates to correct their directory information, and a handout outlining the President’s talk.

B.    The minutes of the November 19, 1999 meeting were approved without correction.

C.    Keith Howell introduced President Broad for her report.
 

The President covered several topics:

Tuition: The Board of Governors acted upon the tuition proposal made by the President in her draft plan covering tuition, capital planning and financial aid. The plan she proposed was complex, reflecting the complex situation.

A university wide task force investigated several indexes that might be used to determine the amount of a tuition increase, including the CPI and various cost of living indexes. The CPI was chosen as the most appropriate index if student fees were to fund increases; per capita income would have been used if funds were to be from other sources. The CPI was 2.1%, which formed the basis of the university proposal. Several increases were proposed, differing for graduate vs. undergraduate students as well as a separate increase for UNC A.

The BOG also considered proposals from each campus to meet specific campus needs. Last year, as well as this, most proposals were to meet graduate programs needs. The policy of the BOG is that extraordinary increases may be justified only under extraordinary circumstances to meet specific needs. The BOG agreed to approve the President’s request for increases at UNC CH and NCSU for a two-year period, and later approved requests from three other campuses.

The BOG appreciated the huge financial strains in the State after the hurricane relief expenses and resulting from the recent court decisions relating to retirement and to intangibles taxes. The latter, for 240 million dollars, has not been funded. These extraordinary circumstances required the BOG to take actions that are unique and special, and the recent BOG decisions do not reflect a change away from maintaining low tuition for students.

The snows, floods and other weather events are unique. The upcoming election presents yet another quite unique event, with a long-term governor retiring, as are six of the ten members of the Council of State. In short, this year has been and will continue to be a very unique time. The next General Assembly will also redraw districts for the next ten years, which will create even more change. The Assembly will be faced with difficult choices during a time when few may be willing to propose bold initiatives. In short, the current events must be viewed as special and unique, and do not represent a long-term change.

The BOG’s role was much stronger this year, and their proposals were made earlier than usual. The BOG took a much more proactive approach this year, and tuition decisions were made before the beginning of the semester so that students were able to apply for financial aid. If one looks at tuition increases over the years, it is clear that it has been increasing even though these increases drew much less attention. The increased role of the Board in tuition decisions is encouraging from the President’s perspective. This was not always an easy process for the Board, which had to incorporate a variety of perspectives, but although the process was not always easy, the Board’s role in setting tuition is to be welcomed.

The President also spoke about the budget request. Although tuition has garnered much attention lately, it represents only a small part of the University’s budget. The Budget is driven by five themes that serve as guidelines: access, productivity and efficiency, outreach and public service, collaboration with the schools, and competitiveness.

For ACCESS, the major issue is enrollment growth. The University requested almost 36 million dollars to support enrollment growth. A new funding model is in place to distribute funds to support students who learn at a distance. A similar amount was requested for need based financial aid.

For PRODUCTIVITY, the major request was for 30 million to support information technology initiatives. For COMPETITIVENESS, a long overdue increase to support libraries (12 million dollars) and 3 million dollars to continue distinguished professorships were key requests. The President also requested money for continued partnerships with schools and for outreach. Finally, the university is requesting 6% salary increase for faculty in addition to more than 7.6 million dollars to reward teaching excellence.

Three other major issues were addressed:

Capital facilities: The university’s request for $6.9 million for capital improvements and renovations was not granted last year, as the Legislature was unable to reconcile its differences in how these funds might be raised. Our longer-term capital plan was not funded, although money for repairs and renovation was released last week. A select committee has been formed to determine how the university’s request might be addressed. Renovation and rehabilitation represent the largest component of the request; A much more modest amount is to serve additional students, with the hope that newly renovated facilities will be able to accommodate students more efficiently. Finally, some money was requested for special needs, including dormitory rooms. The President suggested that everyone was surprised by the magnitude of needs. The University is undercapitalized by an amount that equals the value of the physical plant of the university. This deficit has developed slowly over many years, but the university is now paying the price of the inability of the State to link capital financing with capital requests. The situation is now at a crisis point, at a time when the other external events make it difficult to hope for much progress. If these issues are not addressed, many campuses will have to turn away students because they will be unable to make a commitment to house them for four years. Campuses with severe space shortages are making such decisions now: Several campuses are unable to provide Biology because they don’t have the facilities in quantity or quality to serve the students; Other don’t have sufficient capability to support research. The President has asked members of the business community to evaluate the University’s plan so that the needs are addressed in a business like way. This community may be able to help the legislators to understand and support the University’s needs.

This is a story that must be told on each of the campuses. The new select committee will begin to hold meetings in February, and will meet on each campus. The committee should conclude before May 8, when the General Assembly returns.

The second of the three special issues is faculty salaries. The President wants to benchmark faculty salaries to the top 20% of peer campuses. This is the highest benchmark the University has ever sought, but it is necessary to retain and attract excellent faculty. The University must become competitive in a way that it has not been before. The University has proposed an ambitious plan, which would bring each campus to the top quintile in its peer group. For some campuses, especially Research I campuses, the gap is even larger when private peers are used as benchmarks. The university believes that the gap between our institutions and public peers should be met by the State, but that the additional gap to reach private peers may be closed through private fund raising.

The University has proposed the "Excellent Universities Act" which will bring faculty salaries up to the 80th percentile over two years, beginning in the next biennium. The cost is estimated to be $28.5 million. The university hopes that the legislature will pass the act this year, even if funding is not available immediately. This is likely to be a difficult piece of legislation to have passed, because it suggests that an ongoing index (comparison with peers) be used in the future to determine salaries. This is also a time to examine the optional retirement programs, which are now being used by 90% of new faculty. The optional retirement program is not competitive. This legislation also attempts to increase the employer contribution.

Finally, the third piece is student financial aid. North Carolina is one of the few states without a need based student financial aid plan. Our tuition has increased, but with the absence of financial aid, our students’ loan base has increased. Therefore, the university proposes a $36.8 million dollar financial aid program.

Finally, the President briefly mentioned the increase admission requirements: she believes that the increase in requirements will mean that students graduating from high school will soon begin to show improvements and achievement.

In response to questions:

What proposals will be made for the ORP?
 

One part will be to increase employer contributions from a little over 6% to between 9 and 10 percent. They also propose to expand eligibility beyond faculty, to include those employees who would be eligible elsewhere. They also propose to eliminate the five-year vesting period.


With respect to the new entrance requirements, what do you see as the role of faculty and Faculty Assembly?
 

The president believes it is an important topic of discussion for Assembly. She believes that end result will be to strengthen the schools. For example, increasing the requirement for foreign language means we must train more teachers.


Close to half the enrollment budget is for distance education. Is there an agreed to plan for this initiative and how it may change our system?
 

It seems to be happening on its own, rather than in response to a specific goal or strategy. If we can find funds to offer the courses, students seem to enroll in them. The University requested funds for 20,000 SCH, but was funded for only 13,000. In spite of that, the campuses delivered over 30,000 hours. The request in this budget partially reimburses institutions for work they have already done. Campuses actually requested funds for an additional 10,000 SCH. Students are using off campus programs as an alternative, especially at institutions that have been unable to accept larger numbers of applicants. The President believes that distance learning will incorporate different strategies, sometimes to meet specific needs but sometimes as a complete initiative. The major victory is that we now have funding.


There seems to be a lost constituency in our system: graduate students at comprehensive universities. Because we are unable to offer competitive packages to them, many of those students also have to work. Is there anything we can do to improve funding for these students?
 

Graduate enrollment has been decreasing nationwide. The recent initiative to raise funding for graduate tuition waivers was important. In general, the President believes that our offers are probably reasonably competitive, and if we get the student aid program approved we should be ok. The nationwide trend in graduate admissions is downward.


From ECU: How is teaching in the system enhanced if we take more students when resources are thin and when they can go elsewhere. Does GA control enrollment any more?
 

What you are seeing is our commitment to provide education to the citizens of North Carolina. On the average, the State has supported each student as strongly as any state in the country. There may be "catch-ups’ at times, where resources trail needs, but if we do not take the lead, we will soon not garner the support and resources. In many states, universities have lost their luster, and if we ever stop putting students first we will be in the same situation.


Could you address student fees?
 

Every campus will bring forth recommendations in March. The President has already proposed a $100 increase across the system. Every Chancellor has agreed to raise fees as way to get the process started.


D.    Chair’s report.

The Second Plenary session convened at 3:45.

The Academic Freedom and Tenure Committee met jointly with the Faculty Welfare Committee. This group met with Mary Wakeford to discuss post-tenure review. Statewide, 1162 faculty were reviewed; of these, 427 were rated above average and 15 were judged to be deficient. The process itself was discussed, and the committee requested that when GA has its review completed that the results be given to the faculty committee. The report will be based on information from campus administrators, and the committee is looking forward to reports from faculty themselves.

Dr. Neufeld reported that GA would start a new study on phased retirement.

Non-tenure Track Faculty: a study will begin this month to report to GA in December. This committee is still being formed, but will include faculty from all the campuses. No non-tenure track faculty will be included, although this may be reconsidered. This initiative resulted in part from concerns raised by the Faculty Welfare Committee last year.

After the joint meeting, Kitty McCollum joined the Welfare committee. The NC health plan now has a new head, and there seems to be increased emphasis on cost cutting. The new prescription drug plan has generated 315,000 calls during its first month. It appears that the new plan will save most people money, except for a small number who may pay more if they are not taking generic drugs.

In terms of health insurance, GA is seeking to increase state support to meet the national average. Regarding faculty benefits, the emphasis will be on the ORP because it is not a state-wide issue and therefore might be easier to change. The goal is to increase the contribution to 9.29% and to have immediate vesting. The ability to "cash out" on retirement has already been approved. It was suggested that GA examine whether part-time faculty might be allowed to have access to the health plan.

Finally, the committee will compile a list of what each institution offers to faculty, who have retired from other institutions.

There was some discussion about the impact on faculty morale from the policy of restricting merit money to a fixed percentage of the faculty. A spirited discussion about recognizing and rewarding merit followed.
 

2.    Budget Committee, Nancy Fogarty

• Be sponsored by either the university or the faculty senate;
• Membership consists of faculty or a combination of faculty, students and staff;
• Functions are to participate in and to monitor budget decisions and to educate faculty;
• Chair is sometimes faculty, sometimes an administrator;
• Chair should meet regularly with Provost to advise priorities, conduct studies and propose strategies; should participate in annual budgeting process and inform faculty.
•  
The committee will distribute further information. 3.    Faculty Governance, Hugh Hindman

Respectfully submitted:

William D. Siegfried