January 31, 2001
PRESENT:  Morrill, Sherwood, McDermott, Kommers, Peed, Linker, Leech,
          Benham, Howard, Stewart, Larsen, Harkin, Mooney, Jacobs for
          Lefcort, Weaver, Amend for McClure, Locke, Lansverk, Levy,
          Bogar, Bond, Jelinski, Francis, McKinsey, Lynch,
          Prawdzienski, Butterfield, Scott, Griffith.

ABSENT:   Young, Hatfield, White, Anderson, Jost, Nehrir, Fisher,

The meeting was called to order by Chair Ron Larsen at 4:10 PM.  A
quorum was present.  The minutes of the January 24, 2001, meeting were
approved as distributed.

Chair's report - Ron Larsen.
     There will be a rally for public education at the Capitol
Building in Helena on March 3.

University System Hearing with Joint Appropriations Education
Subcommittee - Craig Roloff, Assistant Vice President for
Administration and Finance.
     - The Montana University System's presentation today at the
     subcommittee went well.  The presentations by the President and
     the Provost were well-received, and remarks at the end of the
     hearing by students and alumni were excellent.  MSU did a good
     job of addressing the state's return on its investment in MSU,
     the effect MSU has on economic development, and the excellence of
     programs at MSU.
     - President Gamble sees the current budget situation as a
     - There will be communication with the campus about the progress
     of the budget requests.
     - The biennium budget process started last summer.  The MUS asked
     for a $500/resident student increase in both FY02 and FY03.  Both
     Racicot's and Martz's budget proposals included a $100/year
     increase.  The focus has since shifted away from the proposal to
     funding gaps within the executive budget.  Increases for  the
     Bozeman campus, presented by Rod Sunsted, Associate Commissioner
     for Fiscal Affairs, include:
          - Tuition requirements, mandated as 50% of the budget
          increase: $5.2 million.
               - Of this, $1.2 million will be used to annualize the
               current biennium's pay plan.
               - The pay plan for next biennium (4%/year with
               substantial increases in health insurance) is only
               half-funded by the legislature.  The other half, $3.7
               million, would come from increased tuition.
               - Of increased costs for the state auditors, MSU would
               pay half from tuition.
          - Expenditure issues not included in the proposed executive
               - Library inflation (8%/year) - $700,000.
               - Vacancy savings costs (4% plus insurance) - $2.2
               - Retirement pay-outs (an on-going cost which is
               excluded from the legislative budget) - last year
               - Banner operation - $600,000.
          - Revenue issues:
               - Non-resident students declined this year by about 130
               students.  If that rate of decline continues, the
               marginal cost over the next biennium would be about
               $1.5 million, or the total cost would be about $5
               - Utility costs have increased considerably and will
               continue to do so, and it appears at a faster pace than
               earlier predicted.
                    - The cost to backfill the physical plant
                    maintenance budget for money spent on utilities is
                    about $300,000.
                    - Water/garbage increases for the next biennium -
                    - Gas/electricity increases for the next biennium
                    - $1 million.
          - The total additional cost for the biennium for the Bozeman
          campus is $14.8 million, or an annual increase of
          $628/resident student/year or a tuition increase of about
          14% per year.  This assumes no increase in funding from the
          legislature.  If the legislature gives the $100/per
          student/year increase proposed in the executive budget,
          there will be money to cover utility inflation, only.
     - The best recovery realities:
               - MSU may get some money to cover the cost of utility
               - Because the Library is at the heart of education,
               there may be some money for Library inflation.
               - The campus may recover from the decline in
               non-resident students.
               - The regents may be willing to consider a slightly
               higher tuition increase than previously anticipated.
     - In summary, Craig stated that President Gamble has set a good
     tone with the legislature and that he will make a difference with
     the legislature.
     - The legislative time-line is expected to be as follows.
          - The Subcommittee will take executive action next week on
          the MUS budget.
          - In mid-February, the entire appropriations bill will be
          ready to forward to the House Appropriations Committee.
          - By the end of February, the House Appropriations Committee
          will consider it and forward it to the House floor.
          - The Senate committee should have it by mid-March.
          - The full Senate will consider it.
          - The appropriations bill will likely go to a conference
     - Assumptions for student growth at MSU are that there will be
     modest resident growth and modest non-resident decline.
     - It was suggested MSU build a retirement pool, as Grants and
     Contracts currently does for G&C funded salaries.  The Board of
     Regents allows the retirement costs to be paid one year in
     arrears, which makes it easier to budget these costs.
     - It was suggested more consideration be given to energy
     conservation on campus.  Although there is room for improvement,
     Craig stated that MSU consumes less natural gas than five years
     ago, even with more space.
     - President Gamble believes in accountability, assessment, and
     setting priorities, and these will most likely be taken into
     consideration when MSU's budget is put together this spring.

As there was no further business, the meeting adjourned at 5:00 PM.

Joann Amend, Secretary         Ron Larsen, Chair