The executive committee of the Board met at PSU on Friday, Nov. 15, 2002. All non-student members of the Board were in attendance as well.

President Lussier noted that he and Chancellor Jarvis would be meeting with various stakeholders at OSU regarding the selection of an interim president to replace Dr. Risser. Chancellor Jarvis and directors Wustenberg, Barnett and Lehmann will soon bring a name to the Board for its approval.

The Internal Audit Committee presented its annual report, noting there don't appear to be any system-wide problems though a few minor flaws were found in such things as contract monitoring. The audit division of the chancellor's office is staffed at about 80% of the national norm for the amount of state revenues OUS gets which limits the issues they can deal with. Patricia Snopkowski, director of internal audit services, noted that procurement cards carried the biggest risk but were so cost effective, saving about $20/transaction, that they were worth the risk; carefully handled, they are a benefit, she said.

The Academic Year Fee Book amendments for the tuition surcharges winter and spring terms engendered a great deal of discussion. Vice Chancellor Anderes stated that institutions cannot carry any funds forward into the next biennium from this source. Several board members raised questions about the "null and void" language in the proposed amendment to the fee book wherein the surcharge would be abandoned if Measure 28 (the income tax surcharge) passes in January. Primarily, the concern is even if Measure 28 should pass, the revenue picture in Oregon might still demand cuts to the OUS budget; the proposal doesn't permit using the tuition surcharge to make up cuts in funding due to a revenue shortfall. Anderes noted there is no quick way to get extra money in the last five months of the biennium except from tuition; Director Wustenberg pleaded that the system not look first to the students to make up shortfalls and President Lussier observed that the system had protected students by ratcheting down everywhere else first. Grattan Kerans predicted that the November 26th revenue forecast will show another drop but trying to estimate what effect that will have on the OUS at this time is nearly impossible; there's no indication what the governor-elect or the legislature might do to ameliorate needed cuts. He felt the system should adhere to the agreement on tuition developed over the past several months and develop a new plan to address additional revenue shortfalls. The Board decided it should not drop the "null and void" language so it could use a tuition surcharge to offset revenue shortfalls because that was not the understanding reached with students.

Vice Chancellor Anderes gave a current-budget-status update. There's been some backfilling of general fund reductions through tuition from "over enrollment" the acceptance by several institutions of students over and above the number for which RAM funds them. That money, however, goes mostly to educate those additional 6000 students. The Emergency Board must approve using this money for that purpose. Even with those additional dollars, the system is about 9% or so below what the legislature appropriated for OUS at the end of the last session. The major problem now is if there are additional cuts, there is so little time to implement them; if those cuts exceed $1 - $2 million, tuition increases are the only source of funds to which Director Wustenberg took exception.

The executive committee and other board members present talked a bit about strategic directions. The Chancellor and President Lussier have met with the governor-elect to acquaint him with the goals for the system and "The Deal". Tom Imeson, former Board member, is on the transition team for the new governor so higher ed's needs will at least be mentioned. President Lussier has prepared a matrix of goals for the Board for 2003 and the Chancellor summarized the status of each. Director Bassett urged the Board to get involved in the discussions of public finance policy in Oregon, specifically addressing the percentage of state revenues that should go into postsecondary education. But he cautioned the Board to use care in taking on an advocacy role for the system alone as the Board really has two constituencies the citizens of Oregon and the system. The Board will build a timeline and some "complete by" dates to attach to the goals at the December meeting. It will also discuss some governance approaches regarding committee assignments and operating procedures in an effort to streamline its work.