MINUTES OF THE MEETING OF THE BOARD OF GOVERNORS: MAY 3, 2001

As approved at the June 28, 2001, meeting of the Board of Governors. The "in camera" portion of the minutes have not been included herein. Copies of Appendices not included herein are available from the University Secretariat, Room 290, Stevenson-Lawson Building.

The meeting was held at 3:00 p.m. in Room 330, Stevenson-Lawson Building.

PRESENT: Ms. C. McAulay-Weldon, Chair; Ms. J.K. Van Fleet, Secretary

Mr. J. Adams, Mr. S. Adams, Dr. W.A. Bridger, Dr. R. Colcleugh, Ms. H. Connell, Dr. P. Davenport, Mayor A.M. DeCicco, Ms. G. Dybenko, Mr. T. Garrard, Mr. W. Gibson, Ms. S. Grindrod, Dr. R. Harris, Ms. R. Ivey , Mr. D. McDougall, Dr. K. McQuillan, Dr. P. Mercer, Dr. G. Moran, Dr. P. Neary, Mr. T. O'Neil, Ms. M. Parker, Mr. W. Peel, Mr. M. Pickard, Mr. H. Taylor, Mr. T. Vine, Dr. A. Weedon, Mr. A. Wali, Mr. R. Yamada

By Invitation: D. Riddell

BG.01-55 Welcome to New Members

The Chair welcomed Helen Connell and Ginny Dybenko to their first Board meeting.

BG.01-56 Farewell to Howard Taylor

The Chair announced that this is the last meeting for Howard Taylor who has been a member of the Board since June 1, 1993, as an appointee of the Alumni Association. His term ends May 30, 2001.

On behalf of the Board, the Chair acknowledged the contributions that Mr. Taylor made to the deliberations of the Board over the years.

BG.01-57 UWO Board of Governors Bursaries for 2000-2001

The Chair read a letter of thanks from Ms. Lisa Manning, a recipient of a UWO Board of Governors Bursary.

BG.01-58 REPORT OF THE PRESIDENT
[Appendix I]

The President provided an update on provincial funding and the Provincial Throne Speech. The Throne Speech outlined the provincial government's policy agenda for the upcoming session of the Legislature. It is anticipated that government funding will be forthcoming to address enrolment expansion associated with the echo of the baby boom and the double cohort. See Appendix I for details.

Appendix I, distributed with the agenda, also includes a list of Dr. Davenport's activities since the January Board meeting.

PROPERTY & FINANCE COMMITTEE
[Appendices II and III]

BG.01-59 Operating and Capital Budgets, Tuition and Fees

On behalf of the Property & Finance Committee, it was moved by D. McDougall, seconded by R. Colcleugh,

That the Board of Governors approve:

(a) The 2001-02 University Operating and Capital Budgets (Appendix II, Annex 1, orange cover), and

(b) Other Fee Schedules and Tuition Deposits Appendix II, Annex 2, yellow cover).

Dr. Davenport reported that the Senate reviewed the draft Operating and Capital Budgets and Tuition Fees at is meeting of April 20, 2001. During discussion, two proposals were debated and subsequently defeated: a proposal to amend the proposed tuition fees for students enrolled in the MD program and a proposal to amend the tuition fees for students in the Honors BA in Business Administration (HBA).

Dr. Mercer provided an overview of the 2001-02 University Operating and Capital Budget, shown in Appendix II. Copies of overheads used during his presentation are attached as Appendix 1. The presentation included the planning context in which the budget was developed, an update on the current budget year, and anticipated revenue and allocations for the upcoming year.

Total operating revenues for the 2001-02 are forecast at $320,820,217 while expenses for 2001-02 are forecast at $320,501,671.

The 2001-02 Capital Budget is built around the SuperBuild expansion projects. The Capital Plan also addresses two objectives of prime importance to Western -- deferred maintenance and academic facility enhancement.

The operating reserve at the end of 2001-02 is projected to be $1.4 million which is $1.1 million short of the target specified by the Board. The University's projected capital reserve is expected to be at the Board-mandated level of $6 million.

Discussion and Concerns:

Ms. Ivey expressed concern about the proposed draws on the operating reserve and transfers from the undistributed investment income fund. She asked that the Board be provided with a projection of the activity in the undistributed investment income account for non-endowed funds. Dr. Mercer agreed to provide that information in the 2002-2003 budget. Mr. DelMaestro stated that the current projections are that at April 30, 2001, the undistributed investment income account will be $4 million. Projecting out one year to April 30, 2002, assuming an average rate of return of 7.8%, the undistributed investment income account should be approximately $4.4 million. The projected ratio of investments to obligations for the 12 quarter moving average at April 30, 2001, should be over 1.1. It is projected that Western will distribute most of its 2001-2002 investment income, therefore the fund balance will not change significantly.

Responding to Mr. S. Adams's concern that the deferred maintenance fund is not keeping pace with costs, Dr. Davenport stated that annually $750,000 is allocated from the operating budget to the deferred maintenance fund. The total base budget is $5 million in 2001-02. The transfer increases every year by $750,000. Other funding sources for the deferred maintenance fund includes government capital funds when they are available.

Mayor DeCicco stated that it would be beneficial to have a better understanding of how tuition fees are set and what the optimum level of tuition fees is before the tuition becomes unreasonable for students. She agreed that there must be additional funds available to the Faculty of Medicine & Dentistry in order to ensure that the Faculty continues to offer a high quality MD program. She asked if consideration had been given to a different phase-in of tuition fee increases rather than a 40% hike in the first year. She suggested that if the administration needs approximately $500,000 more in the Faculty of Medicine & Dentistry, that the increase could be spread over four years so that each of the students in the MD program pays more, i.e., set tuition at $11,400 in each of the four years. This scenario would achieve the same bottom line but does not create a financial burden on the first-year students.

Dr. Moran stated that the model proposed, where tuition fees for entering students is higher than those students in-program, is the result of an ongoing debate. One school of thought believes that students who are in program should not have surprise increases in tuition fees. The other school of thought is that it would it be fairer to spread the tuition fee increase across all the students. The medical students were consulted about the tuition fee increase at the beginning of the budgeting process and the internal discussions within the Faculty of Medicine & Dentistry suggested, through the Dean, that the students would prefer the first principle, that is, that students in-program should bear minimized tuition increases. The proposed medical tuition fee increase reflects that desire.

Mayor DeCicco stated that in her discussions with medical students, the majority preferred an increase of $11,000 in each of the other two years. She asked if there is any merit in further consultation to see whether or not there would be acceptance of such a tuition fee model. Dr. Moran stated that the proposal will see all students paying $14,000 in four years. The net difference between what the students propose which would set tuition at $11,000 each in four years is close to $1 million/year in revenue and over that period of time is almost $3 million. The bottom line difference between the two proposals is significant and is too large to bridge. He reiterated that the medical tuition increase proposed is not arbitrary. It is the result of consultation over two years with the Dean of the Faculty of Medicine & Dentistry. The increase takes into consideration increasing costs and what revenue the Faculty needs to continue to offer the best possible program. The alternative is to further subsidize the operations of the Faculty of Medicine & Dentistry from other Faculties. At this point the calculations suggest a net inflow of approximately $10 million of revenue into the Faculty of Medicine & Dentistry from other Faculties. This situation cannot continue.

Mayor DeCicco suggested that if the tuition increase could be more evenly distributed in the first year, 2001-02, the administration would have more time to develop a better model for tuition increases for subsequent years. Dr. Moran stated that the Board rejected an increase in tuition fee for medical students three years ago, consequently, the administration has investigated various tuition fee models for some time. Will there be further tuition fee increases? Dr. Moran stated that substantial tuition fee increases were approved in a number of programs five years ago. Tuition in these programs increased modestly in the years since. Dr. Moran stated that students pay a higher share of the cost of their education and he believes that Western is approaching the limit of tolerance. Tuition fees are increased in order to maintain the quality of the education provided.

Ms. Parker observed that the budget document cites that 65% of the net tuition increase returns to the Faculty, but 30% of the increased tuition revenue is removed for financial aid. Therefore, of the remaining 70%, 65% of that income is allocated to the Faculty. That means that only 45.5% of the revenue from the tuition fee increase returns to the Faculty, not 65%.

The tuition fee proposal put forward by the medical students provides a smaller than budgeted increase to the Faculty. Tuition fees set at $11,000 across the board, compared to $14,000, $10,500, $10,500, $10,500, provides a difference in revenue of $150,000; of that a difference of $68,250 is allocated to the Faculty of Medicine & Dentistry.

Ms. Parker spoke against the proposed tuition fee increase for incoming medical students. She stated that accessibility to a medical education is a major consideration. Deregulation of tuition fees in the medical program occurred in 1998. Tuition rose from $4,844 to $10,000, a 107% increase. METTA surveyed students in various years of medicine who paid $10,000 for tuition. Of the students entering in 1997 at the tuition fee of $4,844, 35.7% reported family with incomes of less than $60,000. Of the students in the class entering in 2000 at the tuition fee of $10,000, 14.9% reported family incomes of less than $60,000. This is a 20% decrease in students entering the medical program from families with incomes under $60,000. This supports the argument that an accessibility problem for students from lower income families exists. Three of the four studies conducted show a decrease in accessibility to medical education to students coming from lower income families. The study which is supported by the University is based on postal code data which argues that there is no effect on family income over the same period. However, in that study there is a trend towards a decrease in families with average incomes less than $90,000 over the same period. All of the studies indicate decreased access to medical education for students from lower income families. Students from rural areas return to practice in rural communities and a massive shortage of physicians exists in rural communities. Ms. Parker stated that from a socially responsible standpoint universities are obligated to make the medical program accessible to students from rural areas.

A study recently conducted of those students applying to the MD program for this coming year, Fall 2005, concluded that finances are a factor in deciding where to attend medical school.

Ms. Parker referred to a document on program costing that was provided to the Board at the January meeting as part of the Property & Finance Committee reports. She objected to the suggestion that medical students pay 13.3% of the cost of their education and that when tuition is expressed as a percentage of expenditure for a FTE student, this percentage is 30.8%. As she had noted at the January Board meeting, Malaysian students are charged $25,000 tuition which is said to be full cost recovery. If this is so, then medical students bring in funding through tuition and BIUs which is 130% of the cost of their education.

Mr. Yamada stated it is very difficult to have a meaningful discussion when one has not had a chance to review all the figures. All Board members are concerned about accessibility, but the issue for the Board to consider is whether or not it is fair to spread the increases over existing students versus a substantive increase to entry-level students. The debate leads to the conclusion that it is better to preserve the situation of students in the program as opposed to increasing tuition for all classes and having the option of lowering the entrance fee. The percentage increase for existing students would be considerable in order to achieve the revenue needed by the Faculty of Medicine & Dentistry.

Dr. Moran stated that the proposed medical tuition fee provides a net revenue over the four year period and the only way to generate that same net revenue is for all students to pay $14,000 at the end of the four year period. The administration's tuition fee proposal is the result of a year's consultation with the students.

Mr. J. Adams reiterated concerns about accessibility and Western's desire to provide a quality education. He voiced concern about how tuition fee decisions are made. In order to maintain the quality of the medical program and to improve the quality, a certain amount is funding is required. There must be an improvement in terms of how Western accounts for costs of a program.

Dr. Davenport responded to the following questions:

Has the administration carefully considered the alternative tuition fee proposal the students suggested? Yes, an alternative tuition fee proposal was presented several weeks ago to the Dean of the Faculty of Medicine & Dentistry and the administration learned about it. The proposal was discussed at the Senate meeting. The Dean of the Faculty of Medicine & Dentistry spoke against the alternative proposal on the grounds that the proposal did not deliver the same amount of revenue over the four years. The alternative proposal was carefully considered.

Is there a difference in revenue to the Faculty? Yes. Beginning in year 2 a very substantial and growing difference in revenue occurs. Future planning for faculty recruitment and the quality of the program requires funds. The fee proposal in the budget document provides a longer time frame.

Does the revenue matter, does it affect quality? The Dean of the Faculty of M&D spoke to this issue at the Senate meeting -- it is expensive to run a Faculty of Medicine. From the student perspective it would be appealing to separate out the costs of teaching and research. A significant amount of the costs associated with research relate to faculty time. Medical schools in Canada are run combining faculty in the classroom, faculty performing research and clinical work.

Can Western commit that each and every student in the program will be able to finish independent of their financial circumstances. Yes, Western is committed to this mission. The deregulation rules issued by the government require universities to allocate 30% of revenue generated from increased tuition fees to financial aid. Students paying deregulated fees who do not have access to funds needed to complete their degree turn to the university. The government requires this commitment.

Does the Faculty of Medicine & Dentistry offer a financial aid program to help medical students finance their first year as is done at the Richard Ivey School of Business? The administration works with each of the deregulated Faculties through the Office of the Registrar to assign a particular individual to assist with financial planning.

Dr. Harris stated that when students attend the admission interviews for the medical program financial aid officers are on site to discuss the student's financial situation and to provide a sense of the costs and what kinds of support can expected from the University. The issues/concerns raised during the debate are not unique to the students in the Faculty of Medicine & Dentistry. These issues face all the students at Western. The Registrar's Office provides "store-front" financial aid services where a financial aid officer meets with students in the faculty. Information is provided to prospective applicants in all programs about the availability of financial aid and information is provided about how to project education costs and how Western financially supports students.

BG.01-59a It was moved by M. Parker, seconded by J. Adams,

Whereas accessibility is compromised, according to three out of four studies recently conducted, and whereas rural students return to rural communities to practice medicine, and these students have decreased accessibility to the program and whereas only $11,000 is available to students in the form of financial aid from the government in support of their education, be it resolved that medical student tuition for the year 2001-02 be set at $11,000 for students in all four years, an increase of $1,000 from current levels and that tuition be capped at this level for these and all other incoming students until such time as OSAP and Canada Student Loan levels are adjusted to accurately reflect the true cost of a medical education.

The Chair ruled the motion out of order on the grounds that it contains a component that is not an amendment to the main motion.

BG.01-59b It was moved by M. Parker, seconded by J. Adams,

That the medical tuition for the year 2001-02 be set at $11,000 for the incoming class and $10,500 for years 2, 3, and 4.

Mayor DeCicco stated she could not support the amendment because it does not provide the same revenue. She asked if the administration could look at a compromise recommendation to achieve the same level of funding spreading the increase over four years rather than doing it all in one year.

The amendment was called and was DEFEATED.

The main motion was called and CARRIED.

Mayor DeCicco asked that the Property & Finance Committee review and in future years consider the principle issue as to whether or not a gradual smaller cost of living increase is better than trying to do it all at once so the Board is not faced with this dilemma during next year's budget debate.

Dr. Davenport stated that the Property & Finance Committee discussed the issues surrounding tuition fees and agreed that this topic should be part of the September Board Retreat agenda.

Mr. McDougall stated that the Property & Finance Committee discussed the budget planning process but believed that at this stage in the process it would be inappropriate to make the kinds of changes proposed. The general consensus is that the budget process would be reviewed so that the assumptions upon which the budget is based will be discussed and debated early enough so that when the Board is faced with approving the budget, these issues would be resolved.

Mr. Yamada stated that the complexity of the University is well documented by the budget material and it would be wrong for the Board to discuss the top line without understanding the impact on the actual operations and administration expenditure. He asked that the revenue discussion not be separated from the expenditure discussion.

Dr. Davenport stated the budget document comes out of a series of meetings between the Provost and the Deans and the other Vice-Presidents and their operating units. These meetings begin in October, with the most intensive meetings taking place in November and December. Timing issues with respect to the development of the University's operating budget are such that the advice of the Board should be received early, preferably at the September Board Retreat.

BG.01-60 Student Fee Funded Units, Ancillaries, and Academic Support Units

It was moved by D. McDougall, seconded by R. Yamada,

That the 2001-02 budgets for Student Fee Funded Units, Ancillaries, and Academic Support Units, and related Activity Fee Rates be approved as summarized in Appendix II, Annex 3 (including revised Table 2, distributed at the meeting - Appendix II).

CARRIED

BG.01-61 Policy on Emergency Response & Preparedness

It was moved by D. McDougall, seconded by M. Pickard,

That the new Policy on Emergency Response & Preparedness (detailed in Appendix III, Annex 1) replace the former Policy on Emergency Planning and Response as Policy 1.4.

CARRIED

BG.01-62 Reduction in Payout Rate to Non-Endowed Funds (Policy 2.11)

It was moved by D. McDougall, seconded by W.W. Peel,

That the payout rate for non-endowed funds be reduced by 1% per year, effective April 1, 2001, and that Section 1.01 of the Investment Payout Policy (Policy 2.11) be amended as follows:

Non-Endowed Funds

1.01 The payout rate on all non-endowed funds will be set each calendar quarter to be equal to the rate of return on 30 day Treasury bills for the immediately preceding calendar quarter. This rate will be reduced by 115 basis points per year to contribute to the cost of custodial services, administrative costs and investment management fees.

CARRIED

BG.01-63 Designated Fellowships

The Board received information concerning the establishment of the Royal Bank Financial Group Foundation Fellow & Executive Director of the Economic Policy Research Institute (EPRI) and the Royal Bank Financial Group Foundation Post-Doctoral Fellow in Political Economy. Details are provided in Appendix III, Annex 2-A and 2-B.

BG.01-64 Report of the Investment Committee

The Report of the Investment Committee, detailed in Appendix III, Annex 3, was received for information.

BG.01-65 Report on Scholarships

The Report on Scholarships, detailed in Appendix III, Annex 4 and Annex 4-Addendum, was provided for information.

BG.01-66 Report on Environmental Incidents and/or Safety Incidents

The environmental incidents and/or safety incidents report contained information about the PCB Storage Facility and a fire in a wastepaper basket in Middlesex College. Complete details are found in Appendix III and Appendix III, Addendum.

CAMPUS & COMMUNITY AFFAIRS COMMITTEE [Appendix IV]

BG.01-67 Code of Student Conduct

On behalf of the Campus & Community Affairs Committee, it was moved by W.W. Peel, seconded by R. Colcleugh,

That the Board of Governors approve The University of Western Ontario Code of Student Conduct as set out in Appendix IV, Annex 1.

Mr. J. Adams voiced concern that the Code applies to off campus conduct of students who are part of a student body such as the USC, SOGS, MBAA. Dr. Mercer stated that the point of the language in Section 6 is precisely to address the issue of liability, not to expand it, but to ensure that the language of the Code is constant with the existing civil liability to which the University would be subject in other respects. For example, it is precisely because the University is subject to occupier's liability when an unauthorized individual who is otherwise associated with the University holds out that he/she can act in the University's interests, that the University must be able to sanction such individuals under the Code.

Asked how many times a year an incident might fall within the scope of the Code, Dr. Mercer stated that the more serious sorts of misadventures are relatively few in number. The Code provides a rational and consistent approach to deal with rare occurrences of serious misbehavior. The range of conduct which would be subject to the Code includes that which in the result might be seen as relatively trivial but which nonetheless might be captured. For example, the situation in which a Dean or Vice-Provost having done an investigation may decide that some form of intervention is required, but where the sanction would be relatively rudimentary, such as the mildest form of reprimand. He did not believe those incidents would come to the forefront if they happened informally.

The question was called and CARRIED

BG.01-68 Annual Report of the University Students' Council on the Activity within the University Community Centre

The report from the USC on activity within the University Community Centre covering the period April 2000 to March 2001 inclusive, detailed in Appendix IV, Annex 5, was received for information.

BG.01-69 Non-Tuition Related Ancillary Fee Levels for 2001-02

CCAC reported that at its meeting of March 8, 2001, Non-Tuition Related Ancillary Fee Levels for 2001-02 were received from the following student groups: University Students' Council, Society of Graduate Students, and the Master of Business Administration Association. Details are found in Appendix IV, pages 6-7.

BY-LAWS COMMITTEE [Appendix V]

BG.01-70 Special Resolution No. 2 - Delegation of Authority

It was moved by S. Adams, seconded by S. Grindrod,

That Special Resolution No. 2 - Delegation of Authority - be amended as highlighted in Appendix V, Annex 1.

CARRIED

BG.01-71 Special Resolution No. 9 - Board of Governors Election Procedures for Faculty

It was moved by S. Grindrod, seconded by S. Adams,

That Election Procedures (Special Resolution No. 9) relevant to election of faculty to the Board of Governors be revised as shown in Appendix V to allow Internet voting.

CARRIED

BG.01-72 Notice of Motion - Amendment to By-Law No. 1 - Delegation of Authority

The Board received notice that the following proposal to By-Law No. 1 - Delegation of Authority will be discussed at the June 28, 2001, meeting.

That By-Law No. 1, Section I. (Delegation of Authority), article 1., be amended to read:

The Senior Operations Committee is authorized to approve appointments, excluding the appointment of the President or a Vice-President, on the recommendation of the President, in circumstances where the selection process has been completed but a regular meeting of the Board is not scheduled to be held within a reasonable time.

BG.01-73 Fall 2001 Board of Governors Election Schedule

Elections will be held for representatives of the undergraduate and graduate student constituencies this Fall. The election schedule is detailed on page 4 of Appendix V.

REPORT OF THE SENIOR OPERATIONS COMMITTEE [Appendix VI]

BG.01-74 Development & Fund Raising Committee

It was moved by R. Colcleugh, seconded by W.W. Peel,

That Howard Taylor be re-appointed to the Development & Fund Raising Committee effective June 1, 2001, in the membership category that does not require concurrent membership on the Board of Governors.

CARRIED

BG.01-75 Appointments to External Boards, Councils, and Committees

The Senior Operations Committee reported appointments to external Boards, Councils and Committees made on behalf of the Board, detailed in Appendix VI.

BG.01-76 The Dean at Western: Responsibilities and Expectations

The Board received for information a statement of the responsibilities and expectations of deans detailed in Appendix VI, Annex 1.

BG.01-77 Board Retreat 2002

The Board Retreat 2002 will be held in conjunction with the Board meeting that has been scheduled for September 26th.

REPORT OF THE MCINTOSH GALLERY COMMITTEE [Appendix VII]

BG.01-78 Removal and Disposition of Art Objects

It was moved by R. Colcleugh, seconded by M. Pickard,

That the Board of Governors authorize the deaccessioning of the art objects listed in Appendix VII, Annex 1

CARRIED

ITEMS REFERRED BY SENATE [Appendix VIII]

BG.01-79 Royal Bank Financial Group Foundation Economic Policy Research Institute

On behalf of Senate, it was moved by P. Davenport, seconded by H. Taylor

That the Board of Governors approve the establishment of the Royal Bank Financial Group Foundation Economic Policy Research Institute (to be commonly known as the Economic Policy Research Institute or EPRI) as a Type 3 research entity, as described in the Constitution detailed in Appendix VIII, Annex 1.

CARRIED

BG.01-80 Senate Information Items

The report Items Referred by Senate, detailed in Appendix VIII, contained the following items of information:

BG.01-81 SELECTED CLIPPINGS [Appendix IX]

The Board received selected media clippings about the President (Appendix IX).

TERMINATION

The meeting adjourned at 5:00 p.m.

Signed by:

C. McAulay-Weldon, Chair
J.K. Van Fleet, Secretary