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Coordinating Board for Higher Education Meeting Minutes 10-00

October 12, 2000

The Coordinating Board for Higher Education met at 10:30 a.m. on Thursday, October 12, 2000 in the Stauffacher Center at State Fair Community College. Members present were:

Lynn M. Ewing, Jr., Chair
Marie Carmichael, Vice Chair
John Bass, Secretary
Mary Findley
Dudley R. Grove
Ray Henry
Sandra D. Kauffman
Jim Summers, Jr.
Mary Joan Wood

Also attending were:

Kala M. Stroup, Commissioner of Higher Education
John Wittstruck, Deputy Commissioner
Brian Long, Associate Commissioner for Fiscal and Legislative Affairs
Robert Stein, Associate Commissioner for Academic Affairs and Planning
Terry Barnes, Asst. Commissioner for Community Colleges & Technical Education
Joy Casada, Secretary to the Board
Janet First, Administrative Assistant
Madeleine Kernen, Faculty Fellow
Shelly Lamb, Administrative Assistant
James Matchefts, MOSTARS Senior Associate (General Counsel)
Dan Peterson, Deputy Director for Missouri Student Assistant Resource Services
Richard Presberry, MOSTARS Senior Associate (Early Awareness & Outreach)
Cheryl Schroeder, Public Information Specialist
Dale Swoboda, Senior Associate for Fiscal Affairs
Leroy Wade, Director for Proprietary School Certification
Paul Wagner, Research Associate for Fiscal Affairs

There being a quorum present, Chair Ewing called the meeting to order. A list of guests attending the meeting is attached. (Attachment A)

Comments from Chair Ewing

Chair Ewing thanked President Steve Poort and State Fair Community College for hosting the CBHE meetings and for Wednesday evening's dinner.

Minutes of the June 8 CBHE Meeting

Mrs. Findley moved that the minutes be approved as submitted. Mrs. Wood seconded the motion, and it was unanimously passed.

Report of the Commissioner

Commissioner Stroup commented that some of the new institutional presidents/chancellors were introduced earlier at the CBHE Presidential Advisory Committee meeting. An orientation was held for all new presidents and chancellors on October 3 by the CBHE staff. Dr. Stroup asked Dr. Long to introduce the legislative budget staff members in attendance. Dr. Long introduced Janelle Jeagers, higher education budget analyst with the Senate appropriations staff, and Debbie Rodman, higher education budget analyst with the Division of Budget and Planning. Commissioner Stroup introduced Dr. Madeleine Kernen, who is serving as a faculty fellow at the department this year. Dr. Kernen is an associate professor in foreign languages and literature at Southwest Missouri State University. She will be working mainly with the academic affairs staff. Commissioner Stroup announced that she had been asked by members of the board to request that when an institution receives any kind of national recognition or honor that the institution send official notification to her so that the board may recognize them. She also announced that the staff would be visiting with Central Missouri State University regarding the opening of a facility in Lee's Summit.

Report of the Committee on Trusteeship Development

Mrs. Mary Joan Wood, chair of the CBHE Committee on Trusteeship Development, stated that a trustee workshop would be held on December 6 in Columbia in conjunction with the Governor's Conference on Higher Education. Mrs. Wood noted that the areas, which the committee decided should be addressed in the workshop, are roles and responsibilities of trustees (primarily for new trustees), technology, ethics, and affordability and accountability. Presenters and speakers have been secured for the sessions. Mrs. Wood stated that the workshop should be very beneficial to all trustees and encouraged presidents/chancellors to attend along with their boards.

Report of the CBHE Presidential Advisory Committee

Dr. Manuel Pacheco thanked the board for offering the CBHE Presidential Advisory Committee an opportunity to interact about issues that are at the forefront of the board's agenda and the opportunity to provide input on those issues. The advisory committee met earlier in the day and considered the following items:

The Comprehensive Technology Plan Proposed by the CTI
Recommendations on Off-campus and Out-of-district Instruction
Five-year Mission Review Summary
Proposed Higher Education FY 2002 Budget Request
MOSTARS Student Grants, Scholarship and Loan Programs, FY 2002
Notification of GEAR UP Grant Award

The following discussion is from the CBHE Presidential Advisory Committee meeting and relates to specific board items.

Comprehensive Technology Investment Plan

Commissioner Stroup reported that instead of investing millions of dollars in comprehensive "virtual universities" Missouri has focused its technology efforts in key areas to produce the greatest benefit. This approach has facilitated the efficient sharing of resources while maintaining institutional differentiation and specialization. The CBHE Advisory Committee on Technology and Instruction reviewed and recommends five technology-related budget requests that comprise a comprehensive technology investment. Dr. Stroup reviewed the five areas and the amount requested for each item.

MOREnet

MOREnet is Missouri's electronic Internet infrastructure for serving higher education, elementary and secondary education, public libraries, state agencies, and Missouri communities. ($15,601,000)

MOBIUS

MOBIUS is Missouri's consortium of higher education academic libraries (public and independent) which share a common library platform (database) and materials delivery system. ($2,400,000)

Missouri Learners' Network

The Missouri Learners' Network (MLN) will provide a single source web access point for information about off-campus, technology-mediated courses for college credit. ($467,076)

Campus Technology Infrastructure

The funds for campus technology infrastructure are to improve technology infrastructure at the campus level for both two- and four-year institutions. ($8,750,000)

Distributed Learning Workshop

The Distributed Learning Workshop (DLW) is a project sponsored by the Midwest Higher Education Commission which, through campus level collaboration, participating institutions help create technology rich, multimedia course modules that are shared among all participating institutions. ($1,250,000)

Dr. Pacheco commented that there was a broad base of support for the recommendations. It was also expressed that technology is an investment and consideration should be given to how the competence of the higher education system can be developed to utilize the technology effectively over the long term.

Recommendation on Off-campus and Out-of-district Instruction

Dr. Wittstruck presented a brief history of House Bill 1456 which makes provision for state funding to support off-campus and out-of-district instructional sites. Designation of HB 1456 sites enables higher education institutions to deliver degree programs and related courses based on need and demand for services to particular under served areas of the state. Prior need for instructional service must be established as outlined in Administrative Rule, 6 CSR 10-6.030 to be eligible for HB 1456 funding. Institutional requests for new locations to be designated HB 1456 sites and/or for additional state support are reviewed by the CBHE based on board policy and statutory regulation. This board item summarizes requests received and the rationale for staff recommendations. Four new sites and a total of $637,471 in new HB 1456 state funds for FY 2002 operations were originally requested by three public institutions as follows:

Moberly Area Community College
Edina (Jim Sears Northeast Technical Center) - $79, 360 requested
Hannibal (Hannibal Regional Office Center) - $43,341 requested
Three Rivers Community College and Southeast Missouri State University
Sikeston (Sikeston Area Higher Education Center) - $308,203 requested
Kennett (Kennett Area Higher Education Center) - $216,567 requested

The staff recommendation is that the Jim Sears Northeast Technical Center in Edina does not meet minimum criteria to be designated as a HB 1456 site because: prior need for education has not been established; Edina is located closer than 30 minutes commuting time from another site operated by Moberly Area Community College with similar services, i.e., Kirksville; enrollment projections do not justify a continuing need for postsecondary education; and utilization of available telecommunications systems for delivery of additional coursework has not been fully explored. Dr. Evelyn Jorgenson commented that she believes there are two statements included in the board item that are incorrect in the amount of state funding for the Jim Sears Northeast Technical Center in Edina. One is that the funding amount of $1,050,000 is overstated by $50,000. Dr. Jorgenson said the $50,000 was appropriated to the Kirksville HB 1456 site. To Dr. Jorgenson's knowledge the $241,028 was printed in error because this amount was never appropriated to Moberly Area Community College.

The staff recommendation for the Hannibal Regional Office Center in Hannibal is that it does not meet minimum criteria to be designated as a HB 1456 site because: the utilization of available telecommunications systems purchased by MACC for delivery of additional coursework has not been fully explored; MACC has not submitted a current needs assessment for delivery of the AA degree and has not received CBHE approval for delivery of the Associate of Arts degree in Hannibal; collaboration, consultation and cooperation among all interested groups including local postsecondary educational providers has not been fully explored; The Hannibal Regional Office Center is located closer than 30 minutes commuting time from Hannibal-LaGrange College, a NCA accredited independent college, which provides the same, or similar instruction; and Culver-Stockton College, a NCA accredited independent college is also located in close proximity to Hannibal and provides the same or similar instruction.

The staff recommended that the Sikeston community be designated a HB 1456 site because: prior and continuing need for educational services has been established; enrollment projections justify a continuing need for postsecondary education; consultation and cooperation with the community and postsecondary educational providers is operative; and instructional services in Sikeston are in alignment with institutional missions. Additional HB 1456 funding for Sikeston is not, however, being recommended.

The staff recommended that The Kennett Area Higher Education Center not be designated as a HB 1456 site because: prior need for educational services has not been established; Kennett is located closer than 30 minutes commuting time from another site operated by SEMO and TRCC with similar services, i.e., Malden; and enrollment projections do not justify a continuing need for postsecondary education. Dr. Kenneth Dobbins urged the board to continue reviewing the enrollment at Kennett.

Mrs. Woods inquired as to the level of enrollment necessary to justify a higher education center. Dr. Wittstruck responded that one guideline that could be used is the board's guidelines for establishing new community colleges which says that an area with a population of 100,000 must achieve a full-time equivalent enrollment of 1,250 after five years and an area with a population over 100,000 must achieve a full-time equivalent enrollment of 1,500 after five years.

Commissioner Stroup noted that these centers receive funding from state appropriations and other sources of approximately $1 million each. She said the board must decide how many higher education centers there should be, the level at which they operate, and the level at which they should be subsidized with state general revenue.

Dr. Edwin Strong, Jr. stated that the Culver-Stockton Board of Trustees has been discussing the issue of collaboration with Moberly Area Community College in serving the Hannibal region and that he has been directed by his board to do everything possible to establish a collaborative partnership with Moberly in serving the Hannibal area.

Five-year Mission Review Summary

Dr. Don Claycomb suggested adding a clause to the second cycle of community college targeted service initiatives (for FY 2002 through FY 2006) that would reiterate the need to avoid unnecessary duplication of programs with those offered by Linn State Technical College, whose statewide mission as a two-year technical college is to offer programs not commonly offered by the community colleges.

Higher Education FY 2002 Budget Request

Dr. Brian Long advised that Attachments A-4 and F-2, Tab K have been modified to accurately include in "Loan Administration" a core of $367,798 for federally funded default aversion contracting that was incorrectly included in "Federal Compliance." Minor corrections were also made for data entry errors. Also, a small adjustment was made on page one of Tab Q to add $5,720 in general revenue to the "MOSTARS Administration" core budget and to correctly adjust the requested increase based on this change.

Fuel and utility amounts requested by the University of Missouri and Lincoln University have been adjusted to $34,936,340 and $784,942, respectively, to correct for misinterpreted data submissions. These amounts are part of the overall inflation adjustment.

Dr. Long described the peer analysis process used to assess base budget adjustments for the three "Phase I" institutions of Missouri Western, Missouri Southern, and Southwest Missouri State. The analysis was performed in consultation with Dennis Jones, National Center for Higher Education Management Systems; Brenda Albright, consultant; and John Minter, Minter Associates, Inc. Each consultant worked independently in performing his or her analyses. The process examined differences among the various types of institutions and how they are funded. National peer institutions were identified with input from the Missouri institutions. The results of these analyses indicate that, relative to their national peers, state support for the Missouri institutions from 1990 to 1999 accounted for a greater portion of their overall revenue increases. It was found that the range of per FTE support between Missouri's bachelor's degree-granting institutions and the lowest funded master's degree-granting institution is narrow and that the gap between the lowest master's degree-granting institution (Southwest Missouri State University) and the highest institution is significant. As a result, the staff will recommend to the board that the funding for Southwest Missouri State University be increased over two years to put it on a par with the next lowest funded master's degree-granting institution in Missouri.

Dr. John Keiser stated that the Council on Public Higher Education unanimously supported the capital budget request. The Council on Public Higher Education also voted 11 to 2 to support the operating recommendations. Dr. John McGuire commented that the community college presidents and chancellors believe 10 percent for maintenance and repair should be used for that purpose, and capital funding should be considered for community colleges as it is for other institutions. Dr. Julio Leon reported that Missouri Southern State College and Missouri Western State College do not support the public four-year college and universities operating budget recommendation since it includes a base adjustment for only Southwest Missouri State University. He requested the opportunity to address this matter directly at the board meeting.

Notification of GEAR UP Grant Award

(End of Dr. Manuel Pacheco's report from the CBHE Presidential Advisory Committee meeting.)

Five-year Mission Review Summary

(For board discussion with the presidents/chancellors see this section of the minutes of the CBHE Presidential Advisory Committee meeting.)

Dr. Wittstruck reported the first phase of the regular five-year mission review begun in 1995 included the following institutions: Missouri Southern State College, Missouri Western State College, Southwest Missouri State University, Linn State Technical College, and the state's public community colleges. In October 1995, the board approved mission implementation plans based on these mission reviews and recommended for FY 1997 first-year mission enhancement funding for these institutions. In the intervening years, the board has received periodic reports from the institutions on the progress each was making in meeting the goals and objectives contained in the board approved mission implementation plans. Each institution has made progress in completing most of the mission implementation plans approved by the board in 1995; however, several challenges remain in meeting those goals that pertain to the institutions' admissions policies and practices. Dr. Wittstruck noted that the community colleges are working toward implementing the State Plan for Postsecondary Technical Education, increasing educational attainment for citizens, and partnering with the workforce development system.

Five-year Mission Review of Community Colleges

Dr. Terry Barnes stated that the in April 1999, the board approved a schedule and guidelines for the second cycle of its five-year mission review of the state's public community colleges. Dr. Barnes noted that the staff has worked long and hard over the last 18 months with the community college presidents and chancellors and is indebted and thankful for their hard work. Based on the results of the first cycle of mission review and planning that has gone into the second cycle of mission review over the last 18 months, the new recommended FY 2002 through FY 2006 targeted service initiatives proposed for the community colleges' enhancement include the following:

Increase college attendance and participation rates among high school graduates from public high schools located in the taxing districts and increase the college participants among "One-stop Career Center" clients;
Create a few very high quality centers of programmatic excellence in technical education;
Develop, establish, and operate a statewide Internet-based associate of arts (AA) degree; and
Promote economic development through education and training of employees, and serve employers through collaboration and partnerships with the Department of Economic Development's efforts to implement the federal Workforce Investment Act, and the state's one stop workforce development delivery system.

Dr. Barnes suggested an addition to Strategic Initiative 2 of the Community College Targeted Service Initiatives that was to address concerns expressed by Dr. Don Claycomb, president of Linn State Technical College, in the CBHE Presidential Advisory Committee meeting. An additional criterion will appear under the heading, "Criteria for funding this action strategy," and will read as follows: Efforts will be made to consider inappropriate duplication of new programs, including proposals from the community colleges, SMSU-West Plains, or Linn State Technical College.

Dr. Henry moved that the Coordinating Board for Higher Education approve the draft of the community colleges' mission implementation and targeted service initiatives for FY 2002 through FY 2006 (Attachment B). He further moved that this action not be a substitute for the board's policies on the review of new certificate and associate degree programs. Instructional programs that have not been approved must complete this process and receive the commissioner's approval before being implemented. Mrs. Findley seconded the motion, and it was unanimously passed.

Five-year Mission Review of Linn State Technical College

Dr. Barnes noted that Linn State Technical College's first five-year mission review cycle culminated in the institution receiving NCA accreditation. To achieve its mission as well as to achieve programmatic excellence in its AAS degree programs, LSTC has proposed a mission implementation plan for FY 2002 that includes:

Developing contextual mathematics modules to help the technical students attain higher levels of proficiency while accommodating different learning styles;
Continuing to advance the salary base for 30 instructors at $2,500 each. The goal is to achieve parity with the comparable nine-month salaries in technical fields at public community colleges; and
Continue to invest heavily in program development, especially in the most recently approved AAS degree programs, including heavy equipment technician technology, electrical distribution systems technology, networking systems engineering technology, telecommunication engineering technology, and civil and construction engineering management technology.

Dr. Claycomb asked Dr. Barnes to clarify that contextual mathematics means "developing industry based mathematics modules which integrate college algebra with real world industry applications and providing a pathway to a successful completion of this high-end course work." Dr. Barnes noted that this definition just simply means that real workplace applications would be used to help these students achieve competencies in mathematics related to their program of study.

Mr. Bass inquired if the staff has received a communication from the NCA regarding any recommendations for Linn State Technical College as a result of its accreditation visit. Dr. Barnes responded that the staff had received a letter, and if it had not been shared with the board, he would do so. Dr. Claycomb noted that the one thing that the NCA did say was that LSTC should focus on the relationship between general education and remedial education which was explained to LSTC as standard procedure for new institutions and he would be happy to share that information with the board.

Dr. Henry moved that the Coordinating Board for Higher Education approve Linn State Technical College's FY 2002 implementation plans to (1) develop contextual mathematics modules; (2) increase salaries for degreed faculty; and (3) provide instructional support for the new AAS degree programs including heavy equipment technician technology, electrical distribution systems technology, networking systems engineering technology, telecommunications engineering technology, and civil and construction engineering management technology. Dr. Henry further moved that this action not be a substitute for the board's policies on the review of new certificate and associate degree programs. Instructional programs that have not been approved must complete this process and receive the commissioner' approval before being implemented. Mrs. Kauffman seconded the motion, and it was unanimously passed.

Commissioner Stroup observed that the NCA peer review team was amazed at the short amount of time it took LSTC to meet initial NCA accreditation standards. She also noted that the majority of the NCA report was positive.

Revisions to the Proprietary School Certification Program Administrative Rule

Mr. Leroy Wade notified the board that this item contained a marked-up copy of the rule that shows the changes that are proposed, a letter of support from the CBHE Proprietary School Advisory Committee, and letter of support from the Missouri Association of Private Career Schools. Mr. Wade introduced the following members of the CBHE Proprietary School Advisory Committee: George Holske, CEO, Metro Business College; Dennis Townsend, President, Electronics Institute; Tom Hollands, President, Missouri Welding Institute and Connie Hollands; Karen Finkenekeller, Director, ITT Technical Institute; and Barry Mannion, Vice President of School Operations, Vatterott College.

Mr. Holske stated that the last revisions to the proprietary school certification program administrative rule were in 1991. Many changes have occurred in education since that time, particularly in distance learning. In addition, the rules and regulations need to be more user friendly as the schools may not be as accustomed to the types of rules and regulations within Missouri; particularly with the number of new schools coming into the state. The CBHE Proprietary School Advisory Committee, CBHE staff, and the Missouri Association of Private Career Schools, all Missouri higher education institutions, and accrediting organizations were involved in these proposed revisions to the rule so that they could adequately address the challenges of the future.

Mr. Wade reported that the definition section of the rule has been expanded considerably from the current rule. It was felt this expansion was necessary in order to help new schools better understand the language and the terminology that is in place. The rule has been reorganized to streamline it to ensure that it is sufficiently broad and flexible enough to meet the different kinds of delivery systems that may emerge in the future. The committee and staff have also worked hard to strengthen some of the areas of consumer protection. Mr. Wade reported that the draft has been shared with the attorney general's office for review in terms of its organization and structure and statements regarding consumer protection.

Mrs. Kauffman complimented Mr. Wade and the advisory committee for going through this very lengthy, difficult process to revise the rule and make it much more user friendly than the current rule.

Mrs. Wood asked if the element of competition impacts whether or not an institution can come into Missouri. Mr. Wade responded that competition and duplication are not a part of the statutory authority for this program but it does have an impact on an institution's decision whether or not to enter the state to establish a school. The staff does try to discourage duplication but the statute does not give them the ability to make that a provision.

Mrs. Kauffman moved that the Coordinating Board authorize the commissioner of higher education to file the proposed administrative rule with the Secretary of State to be published in the Missouri Register at the earliest possible date and to submit concurrently the proposed rule to the joint committee on administrative rules as required by statute. She further recommended that the Coordinating Board authorize the commissioner of higher education to proceed, after the public comment period and in the absence of significant comment, to file an Order of Rulemaking with the joint committee on administrative rules and the Secretary of State for publishing in the Missouri Register on a schedule that the rule 6 CSR 10-5.010 shall become effective at the earliest possible date. Mrs. Kauffman also moved that the Coordinating Board authorize the commissioner of higher education to take the necessary steps to rescind the current administrative rule 6 CSR 10-5.010 regarding the proprietary school certification program on a schedule that will ensure that the rescission becomes effective concurrently with the effective date of the new rule. Mr. Summers seconded the motion, and it was unanimously passed. (Attachment C)

Notification of GEAR UP Grant Award

Commissioner Stroup announced that the U. S. Department of Education has awarded a GEAR UP State Grant to the Missouri Department of Higher Education in the amount of $7.4 million over a five-year period. The goal of GEAR UP programs is to improve the educational attainment of Missouri citizens by providing early college preparation and awareness activities to participating students through comprehensive mentoring, counseling, outreach, and other support services. Another goal of the program is to improve the knowledge of, and opportunities for Missouri families to receive financial assistance. Commissioner Stroup introduced Dr. Richard Presberry of the staff who will be heading the GEAR UP State grant program. Dr. Wittstruck mentioned that Southeast Missouri State University also received a GEAR UP partnership grant. Mr. Bass inquired if timetables have been prepared for beginning the GEAR UP program. Commissioner Stroup responded that the staff is moving as fast as possible and are dependent upon receiving authorization for the additional FTEs that are included in the FY 2001 supplemental budget request.

Report of the Cost Containment and Quality Improvement in Higher Education Conference

Commissioner Stroup expressed her thanks to John Bass, Dudley Grove, and Sandra Kauffman for participating in the conference on behalf of the board. She also thanked President Dean Hubbard and Dr. Jim Cofer along with the CBHE staff for organizing a very strong conference. Some excellent experts on cost containment spoke at the conference. The conference was an outgrowth of several significant commitments to finding ways to make college more affordable, including the recommendations of the Missouri Commission on the Affordability of Higher Education. The conference was supported in part by an Alfred B. Sloan Foundation grant to Northwest Missouri State University. The staff will be working with the institutions on following-up on some recommendations the institutions could implement based on what was learned at the conference. Almost every public institution and many independent institutions were represented at the conference.

Update on the Missouri K-16 Coalition

Dr. Stein provided an update on K-16 activities that have occurred sine the June CBHE meeting. A staff liaison committee with representatives from the three sponsoring boards has been monitoring activities associated with the K-16 report. Very positive responses have been received from institutions nominating representatives to serve on state accreditation review teams for teacher education programs. Dr. Manuel Pacheco will be the first CBHE appointed representative to serve on a review team. That review will be the Missouri Western State College teacher education program. Dr. Stein stated that under the leadership of Dr. Mel George, conversations are being held with the Department of Economic Development to raise money from business and industry to support intensive summer professional development programs in mathematics conducted by master middle school teachers. The K-16 liaison committee has been working with representatives from each board to shape the next major K-16 initiative. The representatives have agreed upon an approach that will be presented to all three boards.

Mrs. Carmichael reported there was good discussion at the September K-16 sponsors' meeting and all three boards were very enthusiastic about collaborating with each other. A lot of the discussion centered on the changing demographics in the state and the importance of closing achievement gaps, particularly between minority and majority students. She pointed out that another major concern of the coalition is improving the quality of teachers. The need to address curriculum and assessment alignment was also a concern. Mrs. Carmichael noted that the charge before the board today is a draft but it will probably remain the same with maybe a few word changes if all three boards agree on the recommended action. The committee has developed a timeline for its work.

Mrs. Grove asked what the role of principals, superintendents, and school boards would be in carrying out the charge and commented that it would be very difficult for a single teacher to effect change without the support of the leadership.

Mrs. Carmichael moved that the Coordinating Board for Higher Education reaffirm its commitment to cosponsor the K-16 Coalition with the State Board of Education and the University of Missouri Board of Curators. The board directs the commissioner of higher education to join with the commissioner of education and the president of the University of Missouri in appointing a task force to develop recommendations aimed at achieving the coalition's goals of enhancing and sustaining a quality teaching workforce, improving minority participation and success at every education level, and improving the performance of all students through the integrated alignment of curriculum and assessment. The board endorses the timeline whereby task force appointments will be finalized by December 2000. The task force will be expected to issue a final report in conjunction with the 2002 Transfer and Articulation Conference. The report shall include an accountability system for monitoring the state's progress in improving teacher quality and increasing student achievement. Mrs. Wood seconded the motion, and it was unanimously passed.

Recommendation on Off-campus and Out-of-district Instruction

(For board discussion with the presidents/chancellors see this section of the minutes of the CBHE Presidential Advisory Committee meeting.)

Dr. Wittstruck commented, in response to a question from Mrs. Grove in the presidential advisory committee meeting regarding the monitoring of mission enhancement, that it is done each year and reported each April in the performance report. Dr. Wittstruck notified the board that Southeast Missouri State University has submitted a revised and lower budget than indicated in the board item for the Sikeston and Kennett 1456 sites.

Mrs. Carmichael moved that the community of Sikeston meets the CBHE HB 1456 criteria for designation as a HB 1456 site. She further moved that Three Rivers Community College and Southeast Missouri State University use existing postsecondary technical education (RTEC) distributions, mission enhancement appropriations, and revenue from tuition and fees to operate the Sikeston Area Higher Education Center. Furthermore, while cooperative sharing of resources with the Sikeston Area Vocational School should continue, all providers should work toward elimination of unnecessary duplication of programs and course delivery between the local AVTS and the new center. Mrs. Carmichael also recommended that the commissioner and department staff continue to work with the institutions that proposed HB 1456 sites to fully explore cooperative arrangements in consultation with public and independent institutions seeking to serve a proposed community, e.g.: Edina and Hannibal, and to fully explore better use of telecommunications for expanded program and course delivery. She further recommended that there is no compelling need for additional HB 1456 sites since (1) there currently are nine approved HB 1456 sites; (2) the state's public community colleges now have $25 million in their core budgets which encourage AAS degree program development on campus and delivery of AAS courses and programs in cooperation with AVTSs across the respective community college voluntary service regions; (3) the goal of the Missouri Learners Network and the public community colleges' FY 2002-2006 mission enhancement initiative is to provide a universal statewide associate of arts degree via the Internet; (4) selected four-year public institutions have mission enhancement funds designated for outreach initiatives; and (5) several of Missouri's 25 independent colleges and universities have articulated off-campus programs and instructional locations across the state that provide additional geographic and programmatic access to Missouri higher education. Mrs. Carmichael further moved that this recommendation is not a substitute for the board's policies on the review and approval of new programs. Instructional programs that have not been approved must complete this process and receive the commissioner's approval before being implemented. Mr. Summers seconded the motions and they were unanimously passed.

Appointments to the Video Instructional Development and Educational Opportunity (VIDEO) Program Advisory Committee

Commissioner Stroup reported that at the June 8, 2000 CBHE meeting the board was scheduled to appoint five individuals to the VIDEO Advisory Committee. An unexpected change in the employment status of one individual scheduled to be appointed resulted in only four individuals actually being appointed to the committee, leaving one vacancy. Since that time another appointee has asked that his appointment be transferred to a recommended replacement. Both of these vacancies are from the four-year public sector. The staff recommended that Dr. Donald Boehnker, Director of the Instructional Technology Center, University of Missouri-St. Louis, and Mr. Shannon Brewer, Director of University Telecommunications, University of Missouri System, be appointed to fill these two vacancies.

Mrs. Grove moved that the Coordinating Board appoint the following two individuals to the VIDEO Advisory Committee: Dr. Donald Boehnker, Director of the Instructional Technology Center, University of Missouri-St. Louis (District 1) to replace Dr. Wendell Smith (District 1) with a term that expires on June 30, 2002; and Mr. Shannon Brewer, Director of University Telecommunications, University of Missouri System (District 9) with a term that expires on June 30, 2003. Mr. Summers seconded the motion, and it was unanimously passed.

Comprehensive Technology Investment Plan

(For board discussion with the presidents/chancellors see this section of the minutes of the CBHE Presidential Advisory Committee meeting.)

The CBHE Advisory Committee on Technology and Instruction reviewed and recommended five technology-related budget requests that comprise a comprehensive technology investment. These five items are MOREnet, MOBIUS, Missouri Learner's Network, Campus Technology Infrastructure, and Distributed Learning Workshop.

Mrs. Kauffman moved that the CBHE include in its FY 2002 budget request the following CTI comprehensive technology investment plan: MOREnet, $15,601,000; MOBIUS, $2,400,000; Missouri Learners' Network, $460,076; On-campus Technology Infrastructure Utility/Lifecycle Funding, $8,750,000; and the Distributed Learning Workshop, $1,250,000. Mrs. Grove seconded the motion, and it was unanimously passed.

Higher Education FY 2002 Budget Overview

(For board discussion with the presidents/chancellors see this section of the minutes of the CBHE Presidential Advisory Committee meeting.)

Recommendations for Public Four-year Institutions' Operating Appropriations, FY 2002

Dr. Long commented that these funding recommendations reflect institutional and CBHE staff efforts to identify priorities for state funding of higher education based on the three strategic issues of access, quality, and efficiency identified in the Integrated Strategic Plan of the Department of Higher Education. The recommendations are designed to promote the goals of the plan through budget initiatives, including institution-specific mission enhancements and incentive funding intended to acknowledge institutional results. The staff reviewed the public four-year institutions' operating budget recommendations with institutional representatives to ensure that both core budgets as well as enhancements contribute directly to the mission of each institution. Dr. Long reported the following inflationary factors were used in the budget preparation.

Salary Increases 3.5 percent
Expense and Equipment 3.5 percent
Fuel and Utilities Actual Request
Library Acquisitions 3.5 percent
Scholarships 3.5 percent

The application of these factors resulted in an inflationary increase of $51,122,358.

The increased recommendation of $12,076,062 for maintenance and repair is intended to continue the effort of the Department of Higher Education, the Governor, and the General Assembly to earmark 1.25 percent of facility replacement value for continuing campus maintenance.

Section 173.0030 (7) requires the CBHE to review the mission statements and mission implementation plans of each public four-year college and university on a five-year cycle. Based on these reviews with the institutions, the CBHE staff has prepared a recommendation for an increase of $17,842,170 for Phase III Mission Enhancement. Phase III institutions include Lincoln University, the University of Missouri, Harris-Stowe State College, and Truman State University. These institutions are scheduled to report to the board in April 2002 on the progress each has made toward meeting the mission accountability measures the board approved on June 11, 1998. The Phase III institutions mission enhancement requests are s follows.

Harris-Stowe State College ($660,490) For FY 2002, Harris-Stowe State College's mission enhancement proposal concentrates on three key areas: (1) strengthening degree programs that focus on the young child by adding faculty; (2) providing staff support for the college's emerging instructional telecommunications capacity; and (3) improving the quality of core programs for prospective teachers. Included in the colleges' mission implementation plan for FY 2002 is a capital appropriation request for funds to plan a permanent facility for the business administration programs that are part of the institutions mission implementation plan approved by the board in October 1997. The FY 2002 mission enhancement plan includes the addition of 3 FTE faculty members and 6.5 FTE institutional support staff.

Truman State University ($1,440,000) During FY 2002 Truman State University will continue its efforts to strengthen its liberal arts culture by adding new faculty to enhance its liberal studies program and develop stronger student/faculty interactions. The university's FY 2002 mission implementation plan also includes efforts to: (1) continue building library collections that are consistent with the university's liberal arts tradition, (2) advance its visiting distinguished scholars program, and (3) improve instructional technology resources. Funding for the FY 2002 mission enhancement plan includes the addition of five instructional faculty and staff positions and one librarian.

Lincoln University ($741,680) During FY 2002, mission enhancement funds for Lincoln will strengthen the university's position and competitiveness by enhancing its programs that prepare students for diverse career opportunities in agriculture and science ($374,760) and provide the required match for the institution's federal 1890 land grant mission ($366,920).

University of Missouri ($15,000,000)

The University of Missouri requested $20 million in mission enhancement funding. Staff recommendations adjust the University's request based on the board's financial commitment to mission enhancement at the University of Missouri.

University of Missouri at Columbia ($6,527,700): It is recommended that these funds be used for the following initiatives: (1) interdisciplinary graduate, professional, and research programs in the life sciences; (2) interdisciplinary graduate, professional, and research programs in the social and behavioral sciences; (3) enhancing connections among graduate programs, research, and the undergraduate experience; and (4) interdisciplinary graduate, professional, and research programs in global and information technologies. Funding for the initiative related to enhancing the quality of life through research on economics, education, and social issues is not being recommended. Funding for this initiative was recommended in the university's FY 2000 mission implementation plan.

University of Missouri at Kansas City ($2,419,400) It is recommended that UMKC use these funds to: (1) strengthen graduate education and research academic units; and (2) advance its leadership position in interdisciplinary graduate education and research. Funding for electronic access to library collections is not recommended since it is expected that this initiative is included in the university-wide mission enhancement request for libraries and library technology.

University of Missouri at Rolla ($1,945,200): It is recommended that these funds be used for the following: (1) research and educational programs focused on Missouri's needs; and (2) service to Missouri - outreach. Funding for the student leadership development initiative is not being recommended.

University of Missouri at St. Louis ($2,107,700): It is recommended that UMSL use these funds for the following initiatives: (1) enhancing quality of, and access to higher education through masters degree-completion partnerships with Harris-Stowe State College and 2 + 2 articulated program agreements with area community colleges; (2) enhancing programs in health, science, and technology; and (3) synergy among graduate programs, research, and the undergraduate experience. Mission enhancement funding is not recommended for programs and research in education and public policy as funding for these were recommended in FY 1999.

University of Missouri Extension ($500,000): Mission enhancement funding recommendations for UM Extension will enhance educational programming dedicated to priority issues and concerns related to environmental quality and natural resources, nutrition and health, and agricultural profitability and viability through the Outreach Development Fund.

University Wide ($1,500,000): Mission enhancement funding for the University of Missouri system administration will be used to expand electronic databases and full-text journals and building digital library collections for campus libraries.

The base budget adjustment process for four-year institutions is a direct result of the financial analysis component associated with five-year mission review cycles adopted by the board on April 15, 1999. This analysis will be repeated once every five years at the conclusion of each institution's mission review cycle. Staff worked with nationally recognized consultants and officials at Missouri higher education institutions to develop a system of identifying peer institutions that could be consistently applied to all institutions while simultaneously recognizing differences in institutional missions. This process resulted in a recommendation of $1,944,835 for Southwest Missouri State University as its funding was below the mean of per FTE funding among the more than 200 public comprehensive masters degree granting institutions throughout the nation and because of its position as Missouri's lowest funded masters granting institution.

The funding for results request of $14,745,821 continues the state's commitment to promote quality higher education goals by recommending the use of incentives to institutions that emphasize results related to increased access, efficiency, and quality. The FY 2002 recommendations include eight outcome measures that support the state's priorities and recognize improvement. A description of each measure and the amount recommended follows:

Performance of Graduates ($8,184,518):

This element emphasizes the use of measures that indicate the quality of student performance both in general education and in the major. The recommendation includes two funding components: (1) a per capita headcount of $500 for each FY 2000 baccalaureate graduate who successfully passed a licensure, certification, or registration examination or who scored at or above the 50th percentile on a national assessment of general education and/or the major field of study, or received a national award in a field for which there is no standardized assessment; and (2) a sum calculated by multiplying the percentage of teaching graduates who score above the 50th percentile on the PRAXIS National Exit Exam in each graduate's specialty in FY 2000 by .325 percent (0.00325) of the FY 2001 planned expenditure for on-campus instruction.

Success of Underrepresented Groups ($1,413,000):

This element supports the state's goals of access and quality and acknowledges increases in the participation and success of historically underrepresented populations. Underrepresented groups include students who are financially at risk (defined as being in the top quartile for Pell Grant eligibility at point of entry) as well as students who, although not financially at risk, are from a targeted group whose graduate distributions are lower than their group's percentage in Missouri's population 18 years old or older. The recommendation is based on a per capita headcount (unduplicated) and includes $600 for each FY 1999 baccalaureate graduate from a targeted group.

Quality of Prospective Teachers ($760,300):

This element promotes quality by recognizing the state's goal to have high quality teachers. Institutions are rewarded for implementing a high entrance standard for students accepted to teacher education programs, i.e., an ACT composite or SAT score at or above the 66th percentile or 265 or above on each sub-scale of the College Basic Academic Skills Examination (C-BASE) at entry. The recommendation is computed by calculating the percentage of each institution's graduates who met this entry standard. The percent is then multiplied by .15 percent (0.0015) of the FY 2001 planned expenditure for on-campus instruction.

Quality of New Graduate Students ($1,016,500):

This element supports the state's goal to have programs at Missouri's institutions recognized nationally as being among the best in the United States. Institutions are rewarded for implementing high entry standards for new students enrolling in graduate or first professional programs. The allocation is based on a per capita headcount and includes $500 for each FY 2000 new graduate or first professional student achieving a test score at or above the 50th percentile on national entrance examinations or on relevant sub-scales as determined by program admissions committees.

Attainment of Graduation Goals ($867,815):

This element relates to the state's goal to increase institutions' graduation rates. Institutions are recognized for designing programs and providing services that support the timely completion of baccalaureate degrees. The board's graduation goals vary based on institutional admission categories, i.e., open enrollment, moderately selective, selective, and highly selective. The recommendation is computed using a cohort analysis beginning with the freshman class of FY 1994 and calculating the percentage of an institution's six-year graduation-rate goal it has achieved. This percentage is multiplied by .15 percent (0.0015) of the FY 2001 planned expenditure for on-campus instruction.

Quality of New Undergraduate Students ($971,484):

This element supports the state's priority for increased efficiency and quality and relates to the state's goal concerning completion of a 16-unit high school core curriculum as an entrance requirement for all public four-year institutions. The recommendation is calculated by computing the percent of Fall 1999 first-time, full-time freshmen with the 16-unit core curriculum. This percentage for each institution is multiplied by .15 percent (0.0015) of the FY 2001 planned expenditure for on-campus instruction.

Freshmen Completion Rate ($984,107):

This element promotes the state's goal of increasing the proportion of first-time, full-time, degree-seeking freshmen who complete their first academic year with 24 credit hours and a cumulative grade point average of 2.0 or better. Institutions are rewarded for enrolling students full-time who have a high likelihood of being able to succeed in making timely academic progress toward completion of a degree. The recommendation is computed by using a cohort analysis of first-time, full-time freshmen in FY 1999. The board's target freshmen completion-rate goals vary by institutional admission category, i.e., open enrollment, moderately selective, selective, and highly selective. Each institution's percent of "goal met" is multiplied by .15 percent (0.0015) of the FY 2001 planned expenditures for on-campus instruction.

Successful Transfer ($138,875):

This element promotes access and efficiency by recognizing transfers from two- to four-year institutions. Successful transfers benefit both "sending" and "receiving" institutions and provide students with important opportunities to take advantage of the strengths of both of these sectors of higher education. The recommendation includes $125 for each FY 1999 baccalaureate graduate who transferred after completion of an associate degree from a public two-year institution.

Campus Teaching/Learning Improvement Projects ($341,061):

This element encourages the design and implementation of campus programs that recognize and reward teaching/learning improvement. Campus projects are required to involve faculty, include agreed-upon measurements, utilize baseline data, promote incentives for performance, and have systematic evaluation. The FY 2002 core budget includes $3,339,003 in support of teaching/learning innovation and experimentation. Campuses are involved in improving student performance, increasing retention, enhancing campus culture, stimulating critical and creative thinking, and implementing principles of good teaching practice. This element brings the three "Phase I" institutions currently in the five-year mission review year (Southwest Missouri State University, Missouri Southern State College, and Missouri Western State College) to the state goal of dedicating at least one percent of planned instructional expenditures to teaching/learning improvement projects.

SMSU West Plains

The West Plains campus of Southwest Missouri State University receives performance funding for its two-year programs. The total FFR amounts attributable to the West Plains campus' performance ($68,160) is included in the total four-year FFR request. However, the FFR elements for the West Plains campus are the same as for public community colleges.

The request of $5,500,000 for campus technology infrastructure establishes "life-cycle" funding of instructional technology at Missouri's public four-year institutions that recognizes technology as an on-going expense similar to utilities.

UMKC anticipates continued losses in traditional streams of revenue that support medical education. At risk are declines in revenues form affiliated teaching hospitals and physician practice plans, which historically have been an important source of support. An amount of $1,500,000 is requested for the University of Missouri Kansas City Medical Education Program.

The total FY 2002 request for the public four-year institutions operating appropriation is $897,216,445.

A total of $54,881,407 is requested for other University of Missouri Related Programs. In addition to its general operating budget, the University of Missouri has responsibility for the administration of several separate budget programs. A four percent increase for inflation is requested for each program (except the Seminary Fund). The total inflation reques for all programs is $1,184,024. Additional enhancements are requested, including $2,500,000 for UMC Hospitals and Clinics, $250,000 for the Missouri Kidney Program, and $2,954,000 for MOREnet.

Dr. Julio Leon, President, Missouri Southern State College, asked to address the board.

Dr. Leon stated it was not his intent to necessarily rebut the recommendation for Missouri Southern as the institution is in general agreement with most of the recommendation. However, Southern does have some questions about parts of the recommendation. He stated he wanted to present to the board the rationale why he wanted to make a request of the board and referred to an analysis done by the CBHE staff, with the assistance of consultants, comparing Missouri Southern and Missouri Western with peer institutions around the nation and resulting in a recommendation not to make base adjustments for the two institutions. Dr. Leon felt that Southern and Western were judged by criteria that does not fit the two institutions. He stated that Southern and Western have suffered in comparison to the other public four-year institutions since 1984. Until 1984 the funding was based on a percentage of the average cost per credit hour. Originally Southern and Western were funded at a higher percentage because they were just beginning as four-year institutions and were still in the process of developing programs. Dr. Leon stated the reason the formula was changed was because it was recognized that enrollment might decline in the 1980s. The formula was changed so that whatever funding an institution received would be its base and adjustments would be made every year for inflation or improvements.

Dr. Leon stated that former commissioner, Dr. Charles J. McClain, had acknowledged that Southern, Western, and Southwest needed more money but that it would have to be done in the form of some sort of targeted investment with the approval of all other public four-year institutions. This issue was presented to the Council on Public Higher Education who agreed with the concept. The CBHE staff drafted legislation in order to introduce this targeted investment and the calculation was that the adjustment would be 15 percent of instructional expenditures. When other institutions realized that 15 percent of instructional expenditures was a significant adjustment, amendment after amendment was added to the mission review legislation to essentially include all the other institutions as part of this mission enhancement initiative. After Dr. Stroup became commissioner she made this piece of mission enhancement part of a blueprint for all of Missouri higher education. Community colleges, technical education, Funding for Results and other pieces were added to the blueprint. The plan was that at the end of five years every institution would receive a fiscal evaluation and a judgment would be made regarding the need for additional mission related funding. At the end of five years Missouri Southern has received 15 percent of instructional costs while other institutions have received even more on a plan that was originally scheduled only for Missouri Southern, Missouri Western, and Southwest Missouri State University.

Dr. Leon noted that Southern and Western have been told that based on the review of peer institutions around the nation there is no basis for adjustments because when compared to their peers they are doing okay. However, an adjustment was made for Southwest Missouri State University because its funding per FTE student is at the bottom in the state for public master's degree-granting institutions. He requested that the board consider reviewing Southern and Western's recommendation and make some kind of adjustment on the same basis in which the board is recommending $5 million for the community colleges.

Mrs. Findley moved that the FY 2002 general revenue and other fund recommendations for the public four-year institutions, including University of Missouri Related Programs, be approved as presented and modified by the addition of the fuel and utility amounts for the University of Missouri and Lincoln University for submission to the Governor and General Assembly. Mrs. Carmichael seconded the motion.

Mr. Summers moved to amend the motion to table the recommendation concerning mission review for Missouri Southern State College, Missouri Western State College, and Southwest Missouri State University. Mrs. Wood seconded the motion for amendment.

Dr. Henry offered a substitute motion to Mr. Summers' amendment that the CBHE recognizes the need for Missouri Southern State College and Missouri Western State College to have their formula bases reviewed, approves the recommendation of an adjustment for Southwest Missouri State University, and directs the staff to work with Missouri Southern State College and Missouri Western State College on their concerns in time for any revisions to be included in the FY 2002 budget. Mrs. Kauffman seconded the motion, and it was unanimously passed.

A vote was taken on the original motion as amended by Dr. Henry's substitute motion. The motion was unanimously passed. (Attachment D)

Recommendations for Public Four-year Institutions' and Linn State Technical College's Capital Improvements, FY 2002

Dr. Long commented that both the Governor and the General Assembly have endorsed a biennial approach to capital improvement appropriations with the intent that only limited appropriations for capital items would be recommended during the second session of the General Assembly. Because of several lawsuits related to the calculation of total state revenue under the Hancock Amendment, the State Budget Office has not released any of the $133.3 million in general revenue appropriated in the FY 2001 budget for four-year institutions and Linn State capital improvement projects. If the FY 2001 appropriations are redirected to taxpayer refunds, the staff recommends that the affected FY 2001 projects remain the top priorities for capital improvement funding, ahead of any FY 2002 projects. If the FY 2001 appropriations remain intact, then the staff recommends 17 FY 2002 projects with a total amount of $137,433,739. This total reflects an adjustment to account for the 20 percent local match required by the State Budget Office on projects or the portion of projects, that create new square feet. Dr. Long stated that the recommendation for Linn State needs further refinement and that the department would bring a revised recommendation to the board at the December meeting.

Mrs. Kauffman moved that the recommendations for public four-year and Linn State Technical College's capital improvements for FY 2002 be approved, as presented, for submission to the Governor and the General Assembly. Mr. Bass seconded the motion, and it was unanimously passed. (Attachment E)

Recommendations for Linn State Technical College's Operating Appropriations, FY 2002

Dr. Long reported that FY 2002 will mark the sixth year of operation of Linn State Technical College as a state institution and its second year as a North Central Association accredited institution. An inflationary increase of $386,799 is requested for institutional support for Linn State Technical College. Factors of four percent for personal services, expense and equipment, and library acquisitions were applied to the FY 2001 planned, unrestricted expenditures. A four percent inflation factor was added for scholarship costs and fuel and utilities are the actual request.

The requested increase of $214,267 for maintenance and repair is the first time that the Department of Higher Education has requested that funds be earmarked at a rate of 1.25 percent of facility replacement value for continuing campus maintenance.

An increase of $445,000 is requested for five-year mission review and enhancement and includes the following:

Contextual Mathematics Enhancement ($70,000)
Advance Average Faculty Salary ($75,000)
Program Development for Existing Technical Programs ($300,000)

An increase of $150,814 is requested for Funding for Results. A description of each measure and the amount recommended is as follows.

Performance of Graduates ($10,250)

This element emphasizes the use of measures that indicate the quality of student performance both in general education and in the degree area. The allocation is based on a per capita headcount and includes $250 for each FY 2000 associate degree graduate or one-year or greater certificate recipient who has successfully passed a licensure, certification, or registration examination. In addition, associate of arts graduates who scored at or above the 50th percentile on a national assessment of general education are included.

Certificate/Degree Productivity ($84,250)

This element recognizes the state's goal to increase the number of graduates with either certificates of one year or more or associate degrees. Increased certificate/degree productivity provides students with greater opportunities in the workplace and increases students' options in the pursuit of further learning. The recommendation is based on a per capita headcount and includes $250 for each student receiving a certificate of one year or more, or an associate degree in FY 2000.

Success of Underrepresented Groups ($3,300)

This element supports the state's goals of access and quality and acknowledges increases in the participation and success of historically underrepresented populations. Underrepresented groups include students who are financially at risk (defined as being in the top quartile for Pell Grant eligibility at point of entry) as well as students who, although not financially at risk, are from a targeted group whose graduate distributions are lower than their group's percentage in Missouri's population 18 years old or older. The recommendation is based on a per capita headcount (unduplicated) and includes $300 for each FY 1999 graduate from a targeted group with a certificate of one year or more or an associate degree.

Full-Time Freshmen Completion Rate ($6,764)

This element promotes the state's goal of increasing the proportion of first-time, full-time, degree-seeking freshmen who complete their first academic year with 24 credit hours and a cumulative grade point average of 2.0 or better. Institutions are rewarded for enrolling students full-time who have a high likelihood of being able to succeed in making timely academic progress toward completion of a degree. The recommendation is computed by using a cohort analysis of first-time, full-time freshmen in FY 1999. The board's target freshmen completion-rate goal for open-enrollment institutions is 55 percent. Each institution's percent of "goal met" is multiplied by one tenth of one and a half percent (.0015) of the FY 2001 planned expenditures for on-campus instruction.

Successful Job Placement ($32,375)

This element encourages institutions to help students acquire marketable skills that will enable them to contribute to the economic development of local communities. The recommendation is based on a per capita headcount and includes $125 for each successful job placement of students completing programs in FY 1999.

Campus Teaching and Learning Improvement Projects ($13,875)

This element encourages the design and implementation of campus programs that recognize and reward teaching/learning improvements. Campus projects are required to involve faculty, to include agreed-upon measurements, to utilize baseline data, to promote incentives for performance, and to have systematic evaluation. This element implements the state goal of dedicating at least one percent of planned expenditures for on-campus instruction to teaching/learning improvement projects and helps build Linn State Technical College's core assessment budget.

Dr. Henry moved that the FY 2002 general revenue recommendations for Linn State Technical College be approved as presented for submission to the Governor and General Assembly. Mrs. Grove seconded the motion, and it was unanimously passed. (Attachment F)

Recommendations for Public Two-year Institutions' Operating Appropriations, FY 2002

Dr. Long stated that an inflationary increase of $4,217,176 is requested for institutional support for the community colleges. This request adjusts for the effect of inflation on community college districts. Factors of four percent for personal services, expense and equipment, and library acquisitions were applied to the FY 2001 planned, unrestricted expenditures. Estimated increases in fuel and utility costs were also added, as well as a four percent inflation factor for scholarship costs.

An increase of $3,460,215 is requested for Funding for Results. This request continues the state's commitment to promote quality higher education goals by recommending the use of incentives to institutions that emphasize results related to increased access, efficiency, and quality. FY 2002 recommendations include six outcome measures that support the state's priorities and recognize improvement. A description of each measure and the amount recommended follows:

Performance of Graduates ($450,250)

Certificate/Degree Productivity ($1,731,500)

This element recognizes the state's goal to increase the number of graduates with either certificates of one year or more or associate degrees. Increased certificate/degree productivity at community colleges provides students with greater opportunities in the workplace and increases students' options in the pursuit of further learning. The recommendation is based on a per capita headcount and includes $250 for each student receiving a certificate of one year, or more or an associate degree in FY 2000.

Success of Underrepresented Groups ($343,500)

This element supports the state's goals of access and quality and acknowledges increases in the participation and success of historically underrepresented populations. Underrepresented groups include students who are financially at risk (defined as being in the top quartile for Pell Grant eligibility at point of entry) as well as students who, although not financially at risk, are from a targeted group whose graduate distributions are lower than their group's percentage in Missouri's population 18 years old or older. The recommendation is based on a per capita headcount (unduplicated) and includes $300 for each FY 1999 graduate from a targeted group with a certificate of one year or more or an associate degree.

Full-Time Freshmen Completion Rate ($113,246)

This element promotes the state's goal of increasing the proportion of first-time, full-time, degree-seeking freshmen who complete their first academic year with 24 credit hours and a cumulative grade point average of 2.0 or better. Institutions are rewarded for enrolling students full-time who have a high likelihood of being able to succeed in making timely academic progress toward completion of a degree. The recommendation is computed by using a cohort analysis of first-time, full-time freshmen in FY 1999. The board's target freshmen completion-rate goal for open-enrollment institutions is 55 percent. Each institution's percent of "goal met" is multiplied by one tenth of one and a half percent (.0015) of the FY 2001 planned expenditures for on-campus instruction.

Successful Transfers ($447,625)

This element promotes access and efficiency by recognizing the state's goal for increased transfer from two- to four-year institutions. Successful transfer requires a good working relationship between both the "sending" and the "receiving" institutions. The recommendation is based on a per capita headcount with "sending" institutions receiving $125 for each FY 1999 BS/BA graduate from a four-year institution that successfully transferred from a community college with 12 or more hours.

Successful Job Placement ($300,625)

Campus Teaching and Learning Improvement Projects ($73,469)

An increase of $3,250,000 is requested for campus technology infrastructure. This request establishes "life-cycle" funding of instructional technology at Missouri's public two-year institutions (including Linn State Technical College) that recognizes technology as an on-going expense similar to utilities. This request was developed from collaboration between public two- and four-year institutions.

The requested increase for maintenance and repair in the amount of $1,438,403 will raise maintenance and repair funding to five percent of the most currently completed fiscal year's state aid appropriation to community colleges. This request continues the commitment to provide funds to support and preserve state investments in the physical infrastructure of community colleges. Funds must be matched dollar for dollar from local sources. The staff also recommended approximately $6.9 million for community college capital projects to bring the total maintenance and repair/capital request to a total that equals the maximum ten percent level authorized in state statute.

The inflationary increase requested for workforce preparation is $792,844 which will enable community colleges to continue to provide high quality certificate and applied science and associate of science degree programs in vocational education and training within their taxing districts.

An inflationary increase of $1,000,000 is requested for postsecondary technical education. This request reflects the portion of overall inflation of the community colleges' core funding attributable to postsecondary technical education. The funds are distributed among the 12 public community colleges to expand and strengthen technological associate degree of applied science programs in the local taxing district and the extended service region of the community college.

The requested inflationary increase of $54,823 for Out-of-District Programs - Expanding Results reflects the portion of overall inflation of the community colleges' core funding attributable to out-of-district programs.

The recommendation for a community college base adjustment in the amount of $307,993 is a direct result of the financial analysis component associated with the five-year mission review cycle adopted by the Coordinating Board for Higher Education on April 15, 1999. It also fulfills the "limited growth" provision established in section 163.191 RSMo. It is anticipated that this analysis will be repeated once every five years at the conclusion of each mission review cycle.

An increase of $5,000,000 is requested for targeted service initiatives. Community colleges perform many functions that fill education and training needs in their taxing districts. This request is for funding to recognize superior proposals for new approaches to meeting each district's particular needs.

Dr. Long stated that the total FY 2002 request for the public two-year institutions' operating appropriations is $171,620,923.

Mrs. Findley moved that the staff recommendations for FY 2002 community college appropriations be approved, as presented, for submission to the Governor and the General Assembly. Mr. Bass seconded the motion, and it was unanimously passed. (Attachment G)

Recommendations for Public Two-year Institutions' Capital Improvements, FY 2002

Dr. Long noted that Section 163.191 RSMo authorizes an appropriation to community colleges for the cost of maintenance and repair of facilities and grounds and purchases of equipment and furniture, in an amount not to exceed 10 percent of state appropriations to community colleges for operating purposes during the most recently completed fiscal year. The FY 2001 community college core sets aside approximately 5 percent of the on-going operating appropriation for projects involving maintenance, repair, and equipment. That portion of state aid is allocated among the 12 community college districts. In FY 2001, the CBHE recommended the appropriation of an additional 5 percent of state aid for distribution by the CBHE to high priority renovation, maintenance, and construction projects based on criteria contained in the June 1999 board book. A 50 percent local match is required for the distribution of these funds. The continuation of this process in the FY 2002 budget year will represent its third year for capital improvements for the community colleges. The list of recommended projects for FY 2002 have a cumulative total cost of $13,800,000. The state share of these projects total $6,900,000.

Mrs. Grove moved that the community college capital improvement recommendations for FY 2002 be approved, as presented, for submission to the Governor and the General Assembly. Dr. Henry seconded the motion, and it was unanimously passed. (Attachment H)

MOSTARS Student Grants, Scholarship, and Loan Programs, FY 2002

Dr. Long reviewed each of the five categories contained in the recommendations for the MOSTARS FY 2002 budget request. He noted that the core appropriation of $8,617,454 included $492,653 for Grant and Scholarship administration and $8,124,801 for the administration of the loan program. The requested increase in salary for MOSTARS is $88,712, comprising $75,057 for student loans and $13,665 for Grant and Scholarship Administration.

A recent organization and management review of MOSTARS by KMPG Consulting makes clear that the CBHE needs to enhance the current organizational structure, management, and delivery of services for MOSTARS to achieve the goal of full integration of services, programs, and activities. To accomplish this, KMPG has proposed an organization and management structure for MOSTARS that is achievable by 2005 which is consistent with MOSTARS' charge to integrate core student financial assistance functions and services. Building this organizational structure and management will require advancing the role, responsibilities, and functions of the MOSTARS director to at least an assistant commissioner level and by adding positions. This request of $2,367,000 is part of a three-year plan to upgrade key MOSTARS positions and add new positions in key functional areas to strengthen the organization, management, and delivery of services for students and to improve upon the lagging technology used by MOSTARS for its delivery of services and for the operations of student financial assistance programs.

The plan will be funded solely from revenue generated by MOSTARS as part of its responsibility to administer the Federal Family Education Loan Program (FFELP) which generates a sufficient revenue stream to finance the MOSTARS request.

The proposed increased organizational and management structure and technology improvements will lead to the integration of core functions, services, operations, and delivery of services desired for the benefit of students and all Missourians by the CBHE. Based on the proposed plan, MOSTARS will be organized around six functional groups: Student Services; Accounting; Recovery and Contract Management; Public Services; Research and Planning; and, Information Technology.

Implementation of the three-year plan to enhance MOSTARS organization, management, and delivery of services includes the following FY 2002 request for position upgrades and 26.5 new positions in three vital areas: (1) organization and management of MOSTARS (1 position upgrade and 13.0 new FTE positions - $645,000); (2) GEAR UP Early Awareness and Outreach (6.5 new FTE positions - $288,000); and (3) Information Technology Systems Integration and Upgrade (7 new FTE positions and $1,000,000 for contractual services).

The result of this plan, and receipt of authorization by the Governor and state General Assembly for the level of spending authority requested from the federal student loan operating fund in FY 2002, will lead to an improved and integrated organizational and management structure for MOSTARS' core services as well as the enhanced delivery of services by MOSTARS for its core functions (early awareness and outreach, consumer information and protection, administration and operation of both the state and federal student financial assistance programs).

It is expected that another outcome of this plan will result in increased educational attainment levels and increased college going rates among Missouri low-income students. The state's public and independent colleges and universities, participating in the state and federal student financial assistance programs and services administered by MOSTARS, are also expected to save in excess of $1 million a year in administering student financial aid that could ultimately be used for institutionally-based grants and scholarships for students enrolled at the respective institutions. It will also result in students, at all levels, as well as their parents, being better informed about the opportunities that exist beyond high school for them and how those opportunities can be financed.

Federal regulations require MOSTARS to engage in default prevention and default aversion activities and comply with new rules regarding the deposit of funds collected from defaulted borrowers. The amounts requested for these activities if $6,798,200.

Section 173.120 RSMo established a revolving fund used solely to pay claims and administer the loan program. An appropriation is required so that Guaranty Student Loan Program funds may be assessed. The amount requested is $85,000,000

Section 143.781 RSMo gives state agencies the authority to make tax refund offsets against debts owed to the state agency, including defaulted guaranteed student loans. The amount requested is $750,000.

Dr. Long stated that the amount requested for the various grants and scholarship programs is $50,406,405. The individual program requests are as follows:

Academic Scholarship Program $15,787,000
Gallagher Grant Program (Including an increase of $500,000) 18,128,436
Missouri College Guarantee (Including an increase in spending
Authority of $2,540,000) 11,000,000
Advantage Missouri Program (Including an increase of $1,750,000) 4,680,969
Public Service Officer's or Employee's 45,000
Child Survivor Grant Program
Marguerite Ross Barnett Scholarship Program (Including an Increase of $250,000) 750,000
The Vietnam Veterans Survivors Scholarship Program 15,000

The total FY 2002 MOSTARS request is $155,430,384.

Mrs. Findley moved that the CBHE FY 2002 MOSTARS budget request be approved as presented for submission to the Governor and General Assembly. Mrs. Kauffman seconded the motion, and it was unanimously passed. (Attachment I)

Coordinating and Other Internal Budget Items, FY 2002

Dr. Long reviewed the CBHE internal budget request. The salary and E & E adjustments were calculated according to the method prescribed by the Office of Administration and amounts to $44,878. The total amount requested for the board's initiatives is $4,230,076. This category includes requests for the Missouri K-16 Coalition, trustee development, Missouri Learners' Network, MOBIUS, and the Distributed Learning Network. The amount requested for memberships and distributions is $1,587,658. The request of $80,000 for the K-16 initiative represents higher education's contribution to maintaining a K-16 initiative in Missouri. Mr. Ewing asked if the $40,000 for trustee development included both an employee and other expenses. Commissioner Stroup responded that it includes expenses plus one-half time employee. Mrs. Kauffman asked about the ongoing costs for the Missouri Learners Network if it is established and funding for it is appropriated. Dr. Long stated that the $460,000 request funds both the final preparation of the website and the links as well as the publicizing of the website. Commissioner Stroup commented that at this point the CTI committee has no idea of the extent of the usage and it is assumed that the $460,000 would be the core funding.

Mrs. Wood moved that the CBHE FY 2002 internal budget request be approved as presented for submission to the Governor and General Assembly. Mrs. Kauffman seconded the motion, and it was unanimously passed. (Attachment J)

Information Items

The board received the following information items:

Academic Program Actions
2000 Governor's Conference on Higher Education
2002 Conference on Transfer and Articulation
First State Aid and Technical Education Payments, and Capital Recommendations to Community Colleges, FY 2001
Proprietary School Certification Actions and Reviews

Adjournment

There being no further business to come before the board, the meeting was adjourned at 1:50 p.m.

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Lynn M. Ewing, Jr., Chair

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John Bass, Secretary