Approved 10/11/02
THE BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF MARYLAND
                              
                              
                   MINUTES OF THE MEETING
                              
                              
                       August 23, 2002
                              
                    Salisbury University
                              
                     EXECUTIVE SESSIONS
                              
                             
Vice Chairman Larson moved, Regent Wood seconded and the
Board of Regents voted unanimously to convene in closed and
Executive Session on Friday, August 23, 2002, at Salisbury
University beginning at 8:30 a.m. Those present were: Vice
Chairman Larson, Regents Billingsley, Canter, Finan,
Florestano, Houghton, Hoyer, Johnson, Josey, Kendall,
Marcus, Mister, Nevins, Rosapepe, Tydings, Wood.   The Board
of Regents reviewed items on the agenda that were exempted
under the Open Meetings Act for consideration in closed and
executive session. The meeting adjourned at 9:00 a.m.

Vice Chairman Larson moved, Regent Wood seconded and the
Board of Regents voted unanimously to convene in closed and
Executive Session with Chancellor's Council on Friday,
August 23, 2002, at Salisbury University beginning at 11:20
a.m.  Those present were: Vice Chairman Larson, Regents
Billingsley, Canter, Finan, Florestano, Houghton, Hoyer,
Johnson, Josey, Kendall, Marcus, Mister, Nevins, Rosapepe,
Tydings, Wood, Chancellor Kirwan, Vice Chancellors Martin
and Vivona; Interim Vice Chancellor Boesch, Ms. Dawna Cobb
from the Attorney General's Office, Presidents Bogomolny,
Burnett, Dudley-Eshbach, Heeger, Hrabowski, Lowe, Mote,
Ramsay, Thompson, Interim President Jones, Vice President
Bruszewski (FSU), Mr. Lauer (UMBI), Dr. Parker (CUSF), Mr.
Hill (CUSS), Mr. Patton (USSC), Mr. Ross and Ms. Ryan. The
Board of Regents reviewed items on the agenda that were
exempted under the Open Meetings Act for consideration in
closed and executive session.  The meeting adjourned at
1:20 p.m.


Vice Chairman Larson moved, Regent Wood seconded and the
Board of Regents voted unanimously to convene in closed and
Executive Session with the Chancellor on Friday, August 23,
2002, at Salisbury University beginning at 2:00 p.m..  Those
present were: Vice Chairman Larson, Regents Billingsley,
Canter, Finan, Florestano, Houghton, Hoyer, Johnson, Josey,
Kendall, Marcus, Mister, Nevins, Rosapepe, Tydings, Wood,
Chancellor Kirwan, Vice Chancellors Martin and Vivona;
Interim Vice Chancellor Boesch, Ms. Dawna Cobb from the
Attorney General's Office and Ms. Ryan. The Board of Regents
reviewed items on the agenda that were exempted under the
Open Meetings Act for consideration in closed and executive
session.  The meeting adjourned at 3:30 p.m.



Minutes of the sessions are attached.


PUBLIC SESSION:

Call to Order, Welcome and Remarks from the Host Institution

Vice Chairman Larson called the public meeting of the Board
of Regents of the University System of Maryland to order at
9:06 a.m. on Friday, August 23, 2002 at Salisbury
University. Those present were: Vice Chairman Larson,
Regents Billingsley, Canter, Finan, Florestano, Houghton,
Hoyer, Johnson, Josey, Kendall, Marcus, Mister, Nevins,
Rosapepe, Tydings, Wood, Chancellor Kirwan, Vice Chancellors
Martin and Vivona; Interim Vice Chancellor Boesch, Ms. Dawna
Cobb from the Attorney General's Office, Presidents
Bogomolny, Burnett, Dudley-Eshbach, Heeger, Hrabowski, Lowe,
Mote, Ramsay, Thompson, Interim President Jones, Vice
President Bruszewski (FSU), Mr. Lauer (UMBI), Dr. Parker
(CUSF), Mr. Hill (CUSS), Mr. Patton (USSC), Mr. Ross and Ms.
Ryan, USM staff members, members of the press and other
observers.


A.   An official welcome and an overview of Salisbury
     University were presented by President Dudley-Eshbach.
     Three students:  Rochelle Clark, finance international
     business; Matt Anderson, senior biology major; April
     Callaway, math/secondary education/premed track gave
     overviews of their experience as students at SU.

     Ms. Barrie Tilghman, mayor of Salisbury, presented
     concerns about the problems of student behavior and
     student housing. She stated that the city and
     university have been working together to help decrease
     the behavior problem. There is also great concern about
     the lack of housing at SU causing many students to live
     off campus.  Some students cause disruptions within the
     city communities.  Mayor Tilghman said that it is
     imperative that the USM leadership address the housing
     issue.
     
B.   Committee of Whole

     1.   The minutes of July 10, 2002 meeting of the Board of
          Regents were unanimously approved.
     
     2.   Dr. Kirwan presented his first report as Chancellor to
          the Board.  Full text on file with the minutes as well 
          as on the USM web site.
     
     Items 3 and 4 taken together:
     
     3.   Board Meeting Schedule Change
     4.   Proposed Bylaw Change
          Vice Chairman Larson motioned for approval of
          Items 3 and 4 - changing the date of the Annual
          Meeting of the Board of Regents from July to
          September.   Moved by Regent Rosapape; seconded by
          Regent Josey and unanimously approved.

     5.   Updated List of Meeting Information - a revised list of
          meeting dates was provided as an information item.

     6.   Update List of BOR Standing Committees - a revised list
          of Standing Committee membership was provided as an
          information item.

C.   Report of Finance Committee

     Regent Nevins presented a report from the Finance
     Committee on August 22, 2002.
     
     Items 1 and 2 taken together:
     1.   USM: Fiscal year 2004 Schedule of Tuition and Mandatory
       Fees
     2.   USM FY 2004-2008 Tuition Plan
       Regent Nevins stated that there will be a 4% tuition
       increase for in-state at all campuses except Coppin,
       which will be 3%. Out of state tuition increase will
       range from 2-6%.  Depending on the year's budget
       situation, there could be a mid-year tuition
       adjustment but it is hoped that we will be able to
       hold the line on tuition.  Regent Nevins stated that
       the Finance Committee asked the Chancellor, who has
       agreed, to appoint task force to study the whole
       issue of tuition and fees to include members of
       numerous constituency groups represented by the
       campuses.  The task force will report back to the
       Board in the winter or early spring so that the
       Board may incorporate its findings into the decision
       making process for making final tuition decisions
       for FY 2004.
       
       Regent Nevins moved to approve items 1 and 2;
       seconded by Regent Tydings.
       
       Discussion:
       Regent Florestano stated that there had been
       discussion in the Finance Committee meeting
       regarding the concerns that have been raised by the
       Maryland Prepaid Tuition Program regard the tuition
       increases.  It was agreed that the Board would
       consult with the Prepaid Tuition Board and report
       back to the Board.
       
       Regent Wood asked whether the Board would consider
       having a liaison from the new task force to the Md.
       Prepaid Tuition Board to help assist communications
       between the two groups.  Regent Nevins agreed.
       
       Items 1 and 2 unanimously approved
       
     3.   Four Year Tuition Plan Analysis was presented for
       information only.
     
     4.   USM Fiscal Year 2004 Operating Budget Request.  Vice
       Chancellor Vivona presented an overview of the FY 2004
       operating budget request.

         The USM long-term budget is not strong for at least the
       next 2 years with the decline of revenue collections and new
       expenses the State will fund for Medicaid and other social
       services as well as the Thornton Commission.

         Our USM budget will be about $3 billion dollars - up 1
       billion in the last 5 years - bringing the Funding
       Guidelines to 81%.  On the positive side research growth is
       up 27% to $115 million which brings it to a 45% four-year
       increase.

         Financial aid:  USM prepared a study of Financial Aid
       which MHEC will ask the other segments of higher education
       to duplicate.  We found that 69% of resident undergraduate
       students are on some sort of financial aid including loans.
       We also found the link between aid and persistence.  If aid
       is present, retention increases.  If the aid is present in
       the form of indebtedness, persistence declines.

         Another issue is over the last four years we have built
       or renovated 48 buildings which have to be supported from
       the operating budget.
       
         The Separate List Request will be approved at the next
       Board meeting.   The current budget request is inadequate to
       meet our mandatory cost increases.  The objective is to get
       as much as possible into the operating budget and work on
       distributions later.  It's conceivable that the growth will
       be zero as was last year's.
       
         It is important to see how we are doing within the
       framework of the governance architecture.  In the past we
       did not compete very well nationally.  We have installed
       within the funding guideline, a peer performance mechanism.
       There are institution-specific indicators that meet the
       character of each institution.  We are above the peer
       average in 68% of the cases.  We have made a tremendous
       amount of progress over the last three years.
       
         Workforce development - Maryland is the only state in
       the last three years to be in the top five largely because
       of workforce development.  The workforce development level
       is now ranked #1 and the USM has played a large role in
       achieving this status.
       
         Financial stewardship has grown the fund balance by 90%
       - closing this year at $270M which has fueled ability to do
       public/private partnerships.
       
         Assuring Access: baby boom echo -We have honored our
       commitment to grow in terms of students.  We were at 80,000
       FTEs; we are now at 93,000 FTEs - a 16% increase.  We have
       seen the effect of that increase on the quality of the
       funding guideline.  We were at 91%.  There will an increase
       in demand for student placements regardless of future
       declines in population.
       
       Regent Nevins stated that the Regents:
       1    are committed to increase need based financial aide;
       2    will reduce or eliminate "mandates" that are placed on
          us for spending so we can have flexibility to decide on 
          how the funds will be spent.
       3    need to analyze how to balance the need for enrollment
          growth with the limited dollars that are available.

       Regent Josey commented on the workforce development
       ranking.  We need to stress this with legislators.
       
       Regent Tydings congratulated Vice Chancellor Vivona
       on an excellent presentation of the budget.  Regent
       Tydings then suggested that we need to pull the
       institutional Boards of Visitors and presidents
       together in concert with the regents to organize to
       create a plan to advocate to protect the gains made
       in public higher education.  Regent Florestano asked
       that alumni be included

       Regent Wood agreed with Regent Tydings suggestion
       and that we have a theme: "Maintain the Momentum."
       Regent Nevins: agreed and said that he and the
       Chancellor had already discussed such an idea
       essential to protect position of USM.  Regent Larson
       stated that it is important to have the general
       public understand the linkage between work force
       education job creation and recovery of the economy.
       The key to economic recovery is job creation.

       Regent Wood reminded the group of the "USM Economic
       Impact Study" which stated that for every dollar the
       state puts into the USM, $1.75 is generated in the
       Maryland economy.
       
       Chancellor Kirwan: "Regent Tydings, your Call to
       Arms was inspirational and motivating.  I will begin
       a conversation with the presidents immediately about
       how we can collectively organize to carry out the
       mandate that you have described."  He promised to
       return to the Board with a strategy.
       
     Regent Nevins moved approval of item # 4 -FY 2004
     Operating Budget Request; seconded by Regent
     Billingsley and unanimously approved.

     With the concurrence of the Board, Regent Nevins moved
     to place items 5-12 on a consent agenda; seconded by
     Regent Rosapepe.

     5. Extension of the Interim Board of Regents' Policy
        Granting Tuition Remission Benefits to Morgan State
        University'' and St. Mary's College'' Faculty, Staff and
        their Dependent Children; and Baltimore City Community
        College'' Faculty and Staff.
     6. UMES: Construction/Equipment Funding for Murphy Hall
        Anne.
     7. UMES: Increasing in Funding Authorization for Coastal
        Ecology Teaching and Research Laboratory
     8. UMES: Increase in Funding Authorization for the Social
        Science, Education and Health Sciences Building
     9. UMCP: Change in Scope and Funding for Preinkert
        Fieldhouse Modifications
    10. UMCP: Change in Scope and Funding for Hornbake/McKeldin
        Libraries Renovation
    11. UMB: Cost Increase for Student Housing
    12. SU: Public/Private Partnership for Student Housing
     
     Discussion:  Regent Rosapepe commented on the Salisbury
     public/private partnership and noted that it is an
     important project and that The Board has the
     fundamental responsibility to provide students with
     adequate places for them to live.  It is incumbent on
     the campuses to figure out how much housing that they
     need and how to address it.
     
     Regent Nevins noted that this is a complicated issue.
     The state pays for academic buildings but not housing.
     Those are generally done on a public/private
     partnership basis; occasionally in a private/private
     partnership which requires the cooperation local
     governments.
     
     Regent Rosapepe: the students pay for the housing
     regardless if they live on or off campus.  Mayors of
     the communities want students in an environment that is
     best for the students and best for the community. It's
     an issue of campuses planning with the local
     communities for locations and financing.
     
     Regent Florestano requested some data that gives
     Regents a sense of what is the norm for campuses - how
     many of their students they house.  What is a target?
     What should be the ideal?
     
     Items 5 through 12 unanimously approved.

     Items 13/14 presented for information
     13.  Review of Capital Improvement Projects
     14.  Financial Data Report for the Fiscal  Year Ended June
       30, 2002
     
D.   Committee on Audit - Regent Kendall reported that the
     Committee met on August 21.  The annual USM audit is
     underway; enrollment audits have been completed with no
     significant difficulties or problems found.  Reviewed
     internal audits by USM; most audits did have
     recommendations.  There has been good cooperation from
     institutions.  The Committee expressed a concern that there
     is not enough staff at USM Internal Audit.

E.   Committee on Technology: Regent Wood presented overview
     of Digital Divide Initiative event at Bowie State University
     in August which was attended by Lt. Governor Townsend and
     Board Vice Chair Larson.

     Regent Tydings and Vice Chairman Larson congratulated
     Regent Wood on his efforts to make this program a
     reality.
     
F.   Admiral Larson welcomed new student regent Andrew
     Canter who is a student at UMCP.

G.   Reports of Advisory Council
     
     1.   Council of University System Presidents: President
          Hrabowski thanked the Board for bringing Dr.
          Kirwan back to Maryland as chancellor.  The
          presidents feel that a very positive tone is being
          set to work collectively with the chancellor and
          regents.
     
          Regent Florestano congratulated Dr. Hrabowski on
          his recent outstanding appearance on The Today
          Show.

     2.   Council of University System Faculty: Dr. David Parker,
          new chair of CUSF, stated that he is looking forward to
          working with the Regents and CUSF during the coming year.

          Regent Larson welcomed Dr. Parker and thanked Dr.
          Chapin for his work on CUSF over the years.
     
     3.   Council of University System Staff: Mr. Joe Hill,
          chair, reported that the CUSS had met in August; 
          elections have been completed.  The CUSS is 
          recommending that the Board of Regents approve 
          the 8/31/01 draft Policy on Alcohol Abuse.
     
     4.   University System Student Council:  Mr. Tyler Patton,
          chair, said that some items of concern for the 
          Council are shared governance, better communications, 
          student housing and tuition and fees.  He looks 
          forward to working with the Council and Regents 
          during the coming year.
     
G.   No new business

H.   Meeting adjourned at 11:10 a.m.