June 25, 1999

The Board of Regents of Washington State University met pursuant to call in Open Meeting at 10:00 a.m. on Friday, June 25, 1999, in the Library Meeting Room of the WSU Wenatchee Tree Fruit Research and Extension Center, Wenatchee, Washington.

Present: Peter Goldmark, President; Regents: Richard R. Albrecht, Kenneth Alhadeff, Bernadett Buchanan, Phyllis J. Campbell, Richard A. Davis, Robert D. Fukai, Joe King, William D. Marler; President Samuel H. Smith, Provost Gretchen Bataille, Vice President for Business Affairs Samuel Kindred, Vice President for Extended University Affairs Thomas L. Purce, Vice President for Administration Sally P. Savage, Faculty Senate Chair Robert Greenberg, Alumni Association Past President Craig Gable, GPSA President Stephen Kuehn, and ASWSU President Steve Wymer.

Also present were: Executive Director of Budget and Planning Gregory P. Royer, Vice Provost for Research George Hedge, Assistant Vice President for Business Affairs Ernest J. Renfro, Budget Director Karl Boehmke, Director of Statewide Affairs Larry Ganders, Senior Associate Director of News and Information Services High Imhof, and Faculty Senate Vice Chair Peter Burke.

1. Opening and Introductions. Regent Peter Goldmark opened the meeting and provided welcoming remarks.

President Samuel Smith welcomed everyone and introduced Dr. Jay Brunner, Director of the Wenatchee Tree Fruit Research and Extension Center. Dr. Brunner welcomed the Regents to Wenatchee, and Regent Goldmark thanked Dr. Brunner for providing the excellent facilities and hosting the Regents while in Wenatchee.

2. Minutes. It was moved and seconded that the Board of Regents approve the minutes of the May 7, 1999, and June 11, 1999, meetings. Carried.

3. Reports from University Groups. The reports from the University Groups are attached as Exhibit A.

Faculty Senate Chair Robert Greenberg reviewed his report. He also introduced Dr. Peter Burke, incoming Chair of the Faculty Senate for the 1999-2000 academic year. In addition to the report provided to the Regents in their agenda notebooks, Dr. Greenberg added some comments about faculty concerns regarding some possible changes to the retirement system, which is currently receiving some additional scrutiny from the state in the areas of defined benefits and contributions.

Regent Marler asked if Dr. Greenberg had received any feedback after the June 11, 1999, Regents’ meeting concerning tuition increases. Dr. Greenberg stated that the feedback was positive and that many members of the faculty were pleased by the 4 percent increase. He said some individuals were neutral on the subject and that there were others who were upset that the Regents had increased student fees and that no part of that increase would be returned to the faculty in the form of salary increases.

GPSA President Steven Kuehn said he was pleased with the opportunity to represent GPSA and said he looks forward to working with Regents over the course of the upcoming year.

In addition to his report, ASWSU President Steve Wymer reported on the following:

— A survey of student satisfaction conducted over the past six years regarding various services at WSU

— A visit to the universities in Arizona to preview their student recreation centers

— The Alive! program

— The upcoming, annual Cougfest to be held the students’ first week back on campus

Regent King asked what ASWSU is doing to resolve some of the issues with the branch campuses and student government. Mr. Wymer stated that he feels the difficulties ASWSU is experiencing have to do with growing pains within student government and that ASWSU is trying to pinpoint issues of conflict and address those problems. He said, for example, one of the issues that has been resolved concerns the distribution of the S&A fees to the branches. Mr. Wymer said the branches will receive 70 percent of their fees this year and 80 percent next year and that he has met with the branch campus presidents and vice presidents, and they are satisfied with this arrangement. Additionally, Mr. Wymer stated that the ASWSU constitution is being reviewed for clarification as to whom he represents. He explained that, currently, the ASWSU constitution states he represents all WSU students but that additional review is needed with respect to the branch campus students. President Smith noted that Associate Dean of Students George Bettas will be helping ASWSU work on these issues, and Mr. Wymer added that, after more research, ASWSU would bring this issue before the Regents. Regent King said this was an interesting issue, as it is also indicative of how we relate to faculty with respect to building an ongoing campus system.

Regent Davis asked what the student satisfaction survey covered, and Mr. Wymer explained the survey was based on academic and student services. He said two areas where there was a high level of satisfaction were the Libraries and Admissions. In addition, he stated over 70 percent of students polled were highly or moderately satisfied with the Students’ Book Corporation, however, one negative area mentioned was parking services. He said this would be an area that ASWSU will be working on during the coming year.

Alumni Association President Craig Gable reviewed his report and said that the new Alumni Association President, Shari Friedenrich of Huntington Beach, California, would be attending the September Regents’ meeting.

4. President’s Report on the Internal Budget Allocation Process. President Smith provided a detailed report on the internal budget allocation process and an overview of the 1999-2001 Operating Budget. He discussed the diversity of WSU’s income, the sources of income and how it is determined, and to where the income is allocated. President Smith reviewed the steps involved in the internal allocation process and discussed the following points in detail: calculation of carryforward budget, honoring of state intent, allocation by campus, allocation by division, allocation within divisions, and allocation within the areas. See Exhibit B for a detailed copy of the issues covered in President Smith’s presentation.

Regent King thanked President Smith for his helpful presentation regarding the budget process, and inquired about the types of reports that were available for the Regents to review upon request. President Smith stated that he would need to specify whether he wanted a document showing just state funding sources or whether he would want to see all funding sources, which would provide information about how those funds are being expended. Mr. Royer added that very specific reports are generated which break the budgets down by college and department.

Regent King further inquired when the budget would next be changed, and Mr. Royer stated that it changes daily but that reports are completed on a yearly basis. Regent King stated that the budgets he has worked with have a beginning and end, and, as a governing body, it is difficult to determine what is occuring with the budget because it is fluid. A discussion ensued concerning the distribution and timing of various reports, such as summary reports, quarterly reports provided to the Regents, and the kinds of reports available. Regent King also inquired about who approves the budget, and Mr. Royer stated that the President approves the budget.

Regent Alhadeff stated that perhaps there is computer software that would allow tracking of the individual budgets which would help identify requests, allocation of funds, and the standing of each budget. He asked if we would have the funding to obtain such a sophisticated tracking system. Mr. Royer stated that WSU’s system needs new software to enhance our financial management system. He noted that there is no central way to stop departmental spending and that there is much trust involved in this process.

5. Planning Committee Report. Regent Alhadeff reported that the Planning Committee is beginning to prepare for the next five years of WSU’s future. He stated the committee recognizes that the excellence of the University is directly linked to the excellence of the faculty and its environment, and, therefore, our planning process must be sensitive to this fact. He said the Pullman campus is the heart and sole of the University, and the plan must nurture the core campus so that it is a place where people want to come in the future. Regent Alhadeff also said we must have a clear vision of our five-year window and beyond to accomplish our goals.

Regent King stated that, under our land-grant mission, we are recognized for our extended learning services and that as we reach out across the state, and that makes WSU an effective and viable force. Additionally he stated that technology is going to be a critical part of the future and that integrating cutting-edge technology while maintaining our historical sense and local flavor are very important.

6. Academic Affairs Committee Report. Regent King reported that the committee discussed three types of action items routinely handled by this committee, such as what constitutes a school, a department, or a college. He said they also discussed planning for next year, as well as going through the process to make sure Regents are familiar with the Faculty Manual, which will be brought before the Regents at a future meeting.

7. Provost’s Report. Provost Bataille reported that she appeared before the Northwest Commission on Schools and Colleges to answer to the 10-year accreditation review. She said that although a formal response has not yet been received, she feels quite positive about it. Provost Bataille also reported that President Smith, Vice Provost Hedge, and Assistant to the President Beverly Lingle, and she had participated in a conference call for the Inland Northwest Research Association (INRA) earlier that day. She said they were currently forming an alliance with Bechtel who had received the contract to manage the Idaho National Engineering and Environment Laboratory. She said this will bring significant resources back to the institution and will provide excellent opportunities for research and educational opportunities.

Provost Bataille additionally stated that management report concerning the needs in Spokane had been completed. She said the report had reviewed all the studies done in the last 30 years on Spokane needs and that all the reports are consistent about the needs in this area. Provost Bataille summarized the findings and said the report affirmed the Spokane plan.

Lastly, Provost Bataille reported that three deans had recently been appointed. She said the Dean of Engineering and Architecture is Anjan Bose; the Dean of the Graduate School is Karen Depauw; and the Dean of the College of Pharmacy is William Fassett. Provost Bataille noted the Vice President for Enrollment Management position had been offered and that, although the Veterinary Medicine search has been delayed, they are looking into some creative alternatives to this search.

8. Establish a School of Biological Sciences. It was moved and seconded that, effective fall semester 1999, the WSU Board of Regents approve the recommendation to establish a School of Biological Sciences. Carried.

9. Extend the Bachelor of Science in Computer Engineering to WSU Spokane. It was moved and seconded that, effective summer semester 1999, the WSU Board of Regents approve the recommendation to extend the Bachelor of Science in Computer Engineering to WSU Spokane. Carried.

10. Extend the Bachelor of Science in Agriculture through Distance Learning. It was moved and seconded that, effective summer semester 1999, the WSU Board of Regents approve the recommendation to extend the Bachelor of Science in Agriculture through Distance Learning. Carried

11. Finance, Audit, and Capital (FAC) Committee Report. Regent Goldmark stated that the Finance, Audit, and Capital Committee had met and received reports on the following:

— Quarterly Budget Status Update

— Parking Fee Proposal

— Coal, Natural Gas, and electrical services procurement

— The McCroskey Hall project

— Investment Report

— Beverage Partnership Update

— Capital Status Update

— Trust Lands Update

— Indoor Practice Facility

— Supplemental Budget Request

Of particular note, Regent Goldmark indicated that as part of the capital project status update, the Regents had discussed concerns regarding the timeframe and the budgetary framework for the Student Recreation Center project. He indicated that this project will be closely monitored throughout the coming months. Additionally, Regent Goldmark reported that regarding Trust Lands, the Committee discussed diversification of assets. He indicated that this is a complex issue that will require a long-term plan, patience, and political strategizing and that Committee is determined to press forward, as there are resources that could be put to better use for the institution.

12. Report by the Vice President for Business Affairs. Vice President for Business Affairs Samuel Kindred reported that Assistant Vice President and Controller Ernie Renfro would be retiring from the University later in the summer and that this would be his last meeting. He recognized Mr. Renfro for his three decades of service to WSU, stated that the University will miss him, and asked for a round of applause in appreciation for his hard work and dedication. Regent Goldmark also thanked Mr. Renfro for his many years of dedicated service.

13. Contracts under Previous Delegation of Authority (over $500,000). Vice President for Business Affairs Samuel Kindred reported that on the authority delegated to the President or his designee at the meeting of March 5, 1999, he had entered into the following contracts:

Nielsen Dillingham Builders, Inc., Portland, Oregon, for construction of the Physical Plant Maintenance Shops at WSU Vancouver for a total cost of $2,458,791, to be paid from the 1997-99 State Building Construction Account.

Lydig Construction, Inc., Spokane, Washington, to construct the Creamery Annex for a total cost of $1,279,250, to be paid from Creamery Reserves.

MRM Construction, Inc., Ellensburg, Washington, for the Campus Infrastructure and road Improvements, Phase II–1999 for a total cost of $946,226, to be paid from the 1997-99 State Building Construction Account.

14. Contracts under Previous Delegation of Authority (under $500,000). Vice President for Business Affairs Samuel Kindred reported that on the authority delegated to the President or his designee at the meeting of January 24, 1986, he had entered into the following contracts:

Western States Construction, Spokane, Washington, for Phase II of the catwalk extension at Beasley Coliseum, for a total cost of $459,525, to be paid from 1997-99 Minor Capital Safety funds.

Lydig Construction, Spokane, Washington, for the remodeling of rooms 119-121, 123, 124, 124a and 201N at McCoy Hall, for a total cost of $221,241, to be paid from 1997-99 Minor Capital Improvement funds.

Palouse Empire, Inc., Moscow, Idaho, for the “Life Safety Enhancements” gas storage cabinets at Webster Physical Sciences, for a total cost of $193,379, to be paid from 1997-99 Minor Capital Safety funds.

PBI Construction, Inc., Spokane, Washington, for the new gravel storage building at Markley Services Complex, for a total cost of $175,131, to be paid from 1997-99 Minor Capital Improvement funds.

Mechanical Maintenance, Lacey, Washington, for the HVAC Duct Cleaning and Air Balance at Bustad Hall, for a total cost of $159,364, to be paid from 1997-99 Minor Capital Renewal funds.

PBI Construction, Inc., Spokane, Washington, to construct new gated fence around practice field at Rogers Field, for a total cost of 140,785, to be paid from 1997-99 Departmental funds.

Talisman Construction Services, Spokane, Washington, for repair of the exterior brick at Fulmer (Chemistry Synthesis Addition), for a total cost of $119,950, to be paid from 1995-97 and 1997-99 Minor Capital Renewal funds.

A & H Mechanical, Inc., Lewiston, Idaho, to replace water heaters at Wilson Compton Union Building (CUB), for a total cost of $104,290, to be paid from 1997-99 Minor Capital Renewal funds.

RM Mechanical, Boise, Idaho, to replace the wooden cooling tower at the Nuclear Reactor, for a total cost of $101,329, to be paid from 1997-99 Minor Capital Renewal funds and 1997-99 Grant funds.

15. Completion of Contracts. Vice President for Business Affairs Sam Kindred reported that on the authority delegated at the meeting of June 24, 1994, he had approved satisfactory completion of the following contracts:

TLH Abatement, Inc., for the renovation-demolition of Bohler Gymnasium, for a total amount of $915,900.

Mesa Construction, LLC, to install glassboard in the 40, 50 and 60 rooms series in Bustad Hall, for a total amount of $198,264.

Klemo Construction, for remodeling the 4^th floor of Kruegel Hall, for a total amount of $156,675.

Palouse Empire, Inc., for renovation of 3^rd floor for SL & CSL Centers including HVAC of the Compton Union Building (CUB), for a total amount of $127,025

King & King Construction, for a steam line replacement in General Storage, for a total amount of $100,446.

RM Mechanical, Inc., for the chilled water system revisions at Daggy Hall, for a total amount of $33,535.

Best Built Construction, to reroof screenhouses # 9 and #10 at the Prosser IAREC, for a total amount of $21,030.

16. 1999 Consultant Firm Selection for Four Projects. Vice President Samuel Kindred reported that a consultant selection process has been initiated in order that planning can proceed for projects at WSU Pullman, WSU Vancouver, and the Riverpoint Higher Education Park at Spokane. He stated that funding for these projects was appropriated during the 1999 legislative session and should be available effective July 1, 1999. He said the four projects are the Museum of Art Building, WSU Pullman; Johnson Hall Addition, WSU Pullman; Academic Center, Riverpoint Higher Education Park, Spokane; and Academic Building, WSU Vancouver.

Regent Alhadeff asked about the criteria used to select the firms and the budget impact on this first part of the project. Vice President Kindred responded that there is an approved list of consultants the University uses to select the bidders. He stated that their proposals are evaluated, a selection is made based upon those proposals, and that these particular projects were funded in the last legislative session and approved through the pre-design stage.

It was moved and seconded that the Board of Regents delegate authority to the President or his designee, the Vice President for Business Affairs, to approve the selection of firms to provide architectural consulting services and grant permission to proceed with predesign and schematic design for the Museum of Art Building, WSU Pullman; Johnson Hall Addition, WSU Pullman; Academic Center, Riverpoint Higher Education Park, Spokane; and Academic Building, WSU Vancouver. Carried.

17. Care Center/Infant Care, Development Lab. Vice President Samuel Kindred reported that the consulting firm of Tsang Partnership of Tacoma had completed the schematic design drawings and outline specifications for the Child Care Center/Infant Care, Development Lab project and referred to the copy of the schematic brochure that was enclosed in the Regents’ agenda notebooks for their review. He stated that the schematic design had been reviewed and approved by the Project Planning Committee and by the Departments of Facilities Development and Facilities Operations. Mr. Kindred reviewed the specifications for the project and asked for approval of the schematic design documents, authority to proceed with design development, and delegation of authority to approve construction documents, advertise for bids, and award a construction contract, if within funds available.

Regent Dick Davis indicated that he felt the resolution before the Regents was too broad and that it was important for the Board to have another opportunity to review the project before awarding a construction contract. Therefore, the Regents approved the request for action as follows and designated that this project should be brought back to them for approval before a construction contract was awarded.

It was moved and seconded that the Board of Regents approve schematic design, grant authority to proceed with design development, and a delegate authority to approve construction documents and advertise for bids for the Child Care Center/Infant Care Development Lab. Carried.

Regent Alhadeff stated that the construction projects for these large projects are very critical and that he would like to have an opportunity to review an outline of the criteria used for awarding contracts, including issues such as cost overruns and the pro forma used to evaluate them.

18. University Parking System Fee Proposal. Vice President Samuel Kindred reported that the request for an increase in fees was restricted solely to hourly and daily fees and is scheduled for implementation this summer. He stated the proposed increases to annual permits are not scheduled until the fall of 2000. He added that the hourly and daily fee increases are necessary to increase system revenues and to monitor hourly parking demand in the covered structures.

Regent King asked if the Finance, Audit, and Capital Committee had reviewed the proposal, and Regent Goldmark indicated that it had reviewed the proposal. ASWSU President Steve Wymer objected to the proposal. He stated that the recommendation is from the Faculty Senate, that students are virtually unaware of this parking fee increase, and that the students are dissatisfied with parking services. He said he has served on the Parking Appeals Committee and noted that the cost of parking is the biggest complaint received. He pointed out that this is a 50 percent increase and many students will be upset. He said he feels that this is unfair to the students and that they should have an opportunity to voice their opinion.

Student Regent Buchanan stated that she felt that WSU’s parking rates should not be so high and that these rates were competitive with Seattle. She said paying $1.50 per hour of parking is too high and that the students are generally the ones who will have to pay the price.

A discussion ensured regarding parking and the difficulty of managing the needs of the system versus the costs incurred to the consumer.

It was moved and seconded that the Board of Regents approve the schedule of Parking System hourly and daily fee increases effective summer 1999 as appear in Exhibit C. The motion was carried by a vote of 5 to 3.

19. White Hall Renovation (Scholars’ Hall). It was moved and seconded that the WSU Board of Regents approve the Resolution (#990625-70) as appears in Exhibit D authorizing expenditures and requiring reimbursement of those expenditures for the White Hall Renovation (Scholars’ Hall) project. Carried.

(Prior to discussion of items 20 and 21, Regents Richard Davis and Robert Fukai excused themselves from the meeting and asked that the minutes reflect that they have a conflict of interest with regard to the decision to enter into contracts for coal and natural gas procurement and an agreement to provide electrical services to WSU. Additionally, neither Regent Davis nor Regent Fukai was present during the Finance, Audit, and Capital Committee meeting during discussion of these issues.)

20. Coal and Natural Gas Procurement. Vice President Samuel Kindred provided background information as was provided in the Regents’ agenda notebooks concerning the use of coal and natural gas for the power plant on the Pullman campus.

It was moved and seconded that the Board of Regents delegate authority to the President or his designee, the Vice President for Business Affairs, to advertise for bids and enter into a contract with the lowest bidder for the procurement of coal and natural gas. Carried.

21. Updated Electrical Services Agreement . It was moved and seconded that the Board of Regents delegate to the President or his designee, the Vice President for Business Affairs, authority to sign an updated Electrical Services Agreement with Avista Utilities. Carried.

(After Item 21 was discussed and voted upon, Regents Davis and Fukai rejoined the Regents’ Meeting.)

22. Annual Greater Washington State University Allocation. It was moved and seconded that the Board of Regents allocate $84,233 to the Greater WSU Fund for the 1999-2000 fiscal year and delegate authority to the President of the University to expend said sum, plus any earned interest, for the purpose for which this fund was originally intended, as established by the Resolution adopted February 16, 1968, which created the fund. Carried.

23. Report by the Vice President for Extended University Affairs. Vice President for Extended University Affairs Les Purce reported on upcoming planning activities. He stated that he has spent a great deal of time with community college presidents in three areas where allocations for learning centers have occurred, and they are beginning the planning process in those areas. He stated that Extended University Affairs is involved in a major initiative with the College of Business converting courses to be accessed “on-line.” He said also that WSU would be lending financial support to support the criminal justice degree approved earlier this spring, and he stated that it will also help to fill out summer human development programs. Additionally, he noted that Extended University Affairs is using its reserves as a catalyst to move these programs along.

24. Report by the Vice President for University Advancement. President Samuel Smith reported that a search committee had been established for the position of Vice President for University Advancement and will be chaired by Dean of Liberal Arts Barbara Couture. He indicated that the search firm of Korn Ferry represented by Ira Krinsky had been retained to assist with the search. He noted that Mr. Krinsky has a good background in searches related to university advancement. President Smith stated that the first search committee meeting had taken place, that the plan is to have someone hired by October, and that a sub-committee had been appointed to keep the committee moving through the summer months.

25. Confirmation of Directors for the Students’ Book Corporation. Regent Peter Goldmark stated that the meeting of the Board of Regents was recessed and that the meeting of the Shareholder of the Students Book Corporation was declared open.

It was moved and seconded that the Shareholder of the Students’ Book Corporation confirm the following to serve on the Board of Directors: Marc Cooperstein, second year undergraduate, two-year term; Anthony Veiga, second year undergraduate, two year term; Joshua Clearman, appointed be seated Directors to fill the unexpired term of Sarah Kennicutt through May, 2000; Sandra Howard, appointed as an administrative representative as an ex-officio Director, by the Vice President for Business Affairs; Barry Johnston, appointed as an administrative representative as an ex-officio Director, by the Vice President for Business Affairs; Cyril Morgan, a tenured faculty member from the Department of Management and Decision Sciences, appointed by the President; and Donald Stem, a tenured faculty member from the Department of Marketing, appointed by the President. Carried.

The meeting of the Shareholder of the Students’ Book Corporation was declared closed, and the Board of Regents meeting was declared open.

26. Executive Session. At 12:10 p.m., the Regents met in Executive Session for 10 minutes to discuss a personnel matter. At 12:20 p.m., the Regents reconvened in open session. No action was taken as a result of this session.

27. Retirement Announcement. President Smith announced that he had come to a difficult, but important, decision concerning his tenure as President of Washington State University. He stated that after consultation with his wife, Pat, and the Regents, that he had made the decision to retire from WSU effective June 30, 2000. He stated he had achieved the major goals he had set for himself in his presidency and that he believes this is the right time for a presidential transition as WSU goes into a new century with new challenges. He said he and Pat look forward to moving ahead with other goals and opportunities. Regent Goldmark said that he and the Regents accepted President Smith’s decision with deep regret but that they also understood his decision. He said the Regents were supportive of President and Mrs. Smith and their desire to pursue other opportunities. He stated that no one has given more heart and soul to WSU than Sam and Pat Smith.

The Regents’ meeting adjourned at 12:30 p.m.