September 11, 2003» NR11-03

Regents of the University of Alaska will begin considering an administration recommendation to ask the governor and legislature for a 5% increase in operating funds for the ’05 fiscal year when it meets next week in Palmer.

The $10.5 million increase in state funding would cover approximately half of the fixed cost needs the university will be facing in the next fiscal year including negotiated salary increases, health care cost increases, and operating costs of new facilities coming on line. Additional funding would also allow expansion of much needed nursing and allied health programs. The balance of fixed costs funding in the proposed budget would come from non-general fund revenues including tuition and other university receipts. The administration will be asking the regents to approve a 10% increase in tuition rates for each of the next two years.

The regents will meet Wednesday and Thursday, Sept. 17 and 18, on UAA’s Mat-Su Campus near Palmer. Public testimony will be heard in two sessions, both in Room 204 of the Fred & Sarah Machetanz Building. The first session will be Wednesday morning from about 10 to11 a. m. and the second will be Thursday morning from about 9 to10 a. m.

Last year the board approved a 10% tuition hike for the current academic year (04), and deferred consideration of a similar increase for next year. University President Mark Hamilton is proposing 10% increases for each of the next two years, inclusive of the inflation adjustment. From 1995 to 2002, tuition at the university increased each year, but only by the rate of inflation, about 3.5%. During the same period, the average increase nationally was just over 7%, or about twice the rate of higher education inflation.

Public four-year colleges and universities in 49 states increased tuition this year, ranging from 1.7% in Montana to 39% in Arizona. Only Mississippi kept tuition at 2002 levels.

The administration is also proposing a 10% increase to the non-resident surcharge for ‘05 and ‘06. Over the years, the UA non-resident surcharge rate has been at a level far below the average of similar institutions. In a sample of 16 four-year public institutions for ‘03 only North Dakota and South Dakota charge less non-resident tuition than the University of Alaska.

Hamilton is also recommending that the regents approve a policy change that extends from one to two years the time a student would need to be physically present in Alaska before qualifying for in-state tuition rates. Although some states prohibit students from qualifying for in-state tuition if their primary purpose for residing in the state is educational, Hamilton said he believes that moving to a two-year requirement at this time is appropriate for Alaska.

This year it is estimated that student tuition and fees will generate $68.8 million, and next year’s increase, if implemented, is estimated to raise an additional $9.2 million.

Regents also will discuss the university’s operating budget request to the state for FY05. Last year, the university received $215.6 million from the state general fund, about $4.6 million more than the year before. It requested an increase of about $13.5 million.

The administration is recommending that the university seek $226.1 million for FY05, an increase of 5% or $10.5 million. The increase would cover about half of the university’s fixed costs ($9.8 million) and $650,000 for expanding nursing and health programs. Final board consideration of the university’s operating and capital budget request will occur at a board meeting scheduled for November 6.

Board agenda items are listed here by committee of origin:
Academic & Student Affairs Committee

• Consider approval of tuition rates for FY05 and FY06 and changes to residency policy.
• Consider approval of establishment of Business Enterprise Institute at UAA.
• Review of student financial aid.
• Receive reports on UAOnline, enrollment management, student surveys, UA deans of Education, instructional expenditures.

Facilities & Land Management Committee

• Consider approval of the sale of Goldstream land north of Fairbanks.
• Consider approval of the sale of a parcel of land in Homer.
• Consider approval of modifications to the UAA campus land acquisition plan.
• Consider approval of Providence Hospital/APU land acquisition/trade.
• Consider approval of revised capital planning and facilities policy.
• Consider approval of the purchase of the land and facility in Valdez owned by the Church of Jesus Christ of Latter Day Saints Chapel for the Prince William Sound Community College Museum.
• Consider approval for the administration to proceed with a design development study for UAA’s Alaska Native Science and Engineering Program facility.
• Consider approval of funding plan to complete the expanded UAF West Ridge Research Building including debt authorization.
• Consider project approval for UAF’s Biological and Computational Sciences Facility (BiCS) Central Animal Facility and State Virology Lab.
• Consider approval for the administration to proceed with design development and preparation of a project agrteement for the expansion of the Kachemak Bay Branch of the Kenai Peninsula College.
• Conduct a preliminary review of the FY05-10 capital plan and the FY05 capital budget request.
• Review status of UAA master planning efforts.
• Receive status reports on university investments in capital facilities, construction in progress and other projects.
• Receive a report from Steve Smith, the university’s chief information technology officer on Information Technology planning and priorities.

Finance & Audit Committee

• Discuss the university’s FY05 operating budget request. Final approval of both the operating and capital budget requests is scheduled for a meeting on Nov. 6.
• Discuss university’s debt capacity, and the plans for a tax-exempt debt issue.
• Consider approval of changes to the FY04 allocation plan for ConocoPhillips/BP gifts.
• Consider approval of funding plan to complete the expanded UAF West Ridge Research Building including debt authorization.
• Consider certification of the authority and capacity to enter into rate lock agreement for university general revenue bonds to be issued, and authorization for same.
• Consider approval of the proposed student tuition increase.
• Conduct a preliminary review of the FY05-10 capital budget request.

Human Resources Committee

• Consider approval of administration proposal to increase the staff salary grid by 1%.
• Receive reports on new health benefits plan, progrtess of faculty market salary analyses, and on faculty and staff opinion surveys.

Planning and Development Committee

• Consider approval of university’s strategic plan 2009.
• Consider approval of revision to Regents’ Policy on UAF councils.
• Receive an update on university development efforts from Mary Rutherford, associate vice president for development.

All meetings of the Board of Regents and its committees, except for executive sessions, are open to the public.

During the meeting, messages can be left at 907-745-9726, or fax 907-745-9769. Messages should indicate that they are for participants in the Board of Regents’ meeting.

FOR MORE INFORMATION: Bob Miller, 907-474-6311