Penn State Board of Trustees Meeting - AM Session (Jan. 20, 2012)

Uploaded by wpsu on 20.01.2012

>> The Trustees find their seats.
[ Silence ]
>> All right.
I'd like to call the meeting to order.
Keith and Paul, could we get you in your seats, Carl,
Boots [assumed spelling].
Good morning to everyone.
As is the custom, we make a few introductions here first.
We're pleased to have the university faculty senate
officers again here today, Daniel Hagen is chair,
faculty senate, Pam Hufnagel, secretary.
Pam is senior instructor in education
at Penn State Debois and, of course,
I think you know Dan is professor
of Dairy and Animal Science.
Student representatives with us
at our meeting today John Lozano,
president of the graduate student association, T.J. Bard,
president university part undergraduate association.
Thank you for being with us and I will say that in addition
to our meeting today, we had an opportunity this morning to meet
with several constituents.
Well, we met over the weekend with seven.
Last evening we met with the academic leadership council,
university faculty senate council.
This morning as had a breakfast
with student leaders' roundtable.
It was a great experience and I know that my colleagues join me
in saying that we appreciate all of the thoughts
and perspectives shared.
We're trying to listen as hard as we can.
We will now proceed with the business of the day,
and I'd like to remind everyone to turn off your ringers
and set aside your Blackberrys
so we can direct our full attention
to the issues before us.
I'd like to call the meeting to order.
And Mrs. Ammerman will you please call the roll.
>> Trustees Alexander.
>> Here.
>> Allan.
>> Here.
>> Arnelle.
>> Present.
>> Broadhurst.
>> Here.
>> Clemens.
>> Here.
>> Corbett.
>> Here.
>> Dambly.
>> Here.
>> Deviney.
>> Here.
>> DiBeradinis.
>> Here.
>> Eckel.
>> Present.
>> Erickson.
>> Here.
>> Frazier.
>> Here.
>> Garban.
>> Here.
>> Greig.
>> Here.
>> Hayes.
>> Here.
>> Hetherington.
>> Here.
>> Hintz.
>> Here.
>> Huber.
>> Here.
>> Jones.
>> Here.
>> Khoury.
>> Here.
>> Lubert.
>> Here.
>> Masser.
>> Here.
>> Myers.
>> Here.
>> Peetz.
>> Here.
>> Riley.
>> Here.
>> Shaffer.
>> Here.
>> Silvis.
>> Here.
>> Strumpf.
>> Here.
>> Suhey.
>> Here.
>> Surma.
>> Here.
>> Tomalis.
>> Here.
>> Huck.
>> Here.
>> Junker.
>> Here.
>> Metzgar.
>> Here.
>> Rowell.
>> Here.
>> Wolff.
>> Here.
>> And Branstetter.
>> Here.
>> Thank you.
First item, may I have a motion to approve the minutes
of the meetings of the Board held on November 11th of 2011,
and the minutes of the Executive Committee of December 2nd, 2011?
>> So moved.
>> Second.
>> Moved and second.
All those in favor indicate by saying aye.
>> [In unison] Aye.
>> Opposed.
Motion carries.
At this time I'd like to ask President Erickson
to present his informational report.
I might, as Rod comes to the podium, I think all of us
on this Board appreciate what he's done to step in
and lead this institution during a difficult time.
Rod's serving us well, trying to get us moving
in the right direction forward and we appreciate it, Rod,
and I've said it to you before and can't say it enough.
>> Thank you, Chairman Garban,
and good morning and welcome everyone.
Before we move on to the business of the day,
I wish to note the passing of John D. Vairo who played
such a critical role in the founding
of Penn State Delaware County Campus.
Mr. Vairo navigated a series of political
and logistical challenges to oversee the opening
of the campus in 1967.
He served as the campus director until he retired in 1986.
The Delaware County Campus has
since been renamed Penn State Brandywine,
but Mr. Vairo's legacy lives
on through the John D. Vairo Library and Endowment Fund,
a scholarship for undergraduate students, a staff award,
and a state college boulevard in his name.
I'm also pleased to announce
that Penn State Schuykill has a new chancellor,
Dr. Kelly Austin.
Dr. Austin previously served as Vice President of Finance
and Administration at the University of Pittsburgh
at Johnstown where he handled issues related issues
to student retention, the campus operating budget
and the capital budget among other duties.
He has a background that is rich in experience
in student affairs, community relations
and strategic planning.
I hope you'll have an opportunity
to personally welcome Dr. Austin soon.
Finally, I want to acknowledge the appointment of Bill O'Brien
as our new head football coach.
As you know, Coach O'Brien is doing double-duty bringing
together his Penn State football staff
and recruiting while coaching the New England Patriots
as they make a run for the Super Bowl.
I hope you'll have a chance to meet Coach O'Brien
at the Board meeting later this year.
Now to begin, I wish to thank the many members
of the Penn State community who have conveyed their support
over these last two months, or as someone reminded me,
the honeymoon period of my presidency.
Today I wish to review some of the initiatives
and changes we put into place in response to the tragedy that has
so deeply affected the Penn State community and legion
of others around the nation and beyond.
I also want to look to the future with confidence
and a renewed vision for the coming year.
This has been an extraordinarily trying time for our university
and has changed us in countless ways.
Difficult as it has been, the Penn State community has held
on to its historic principals and I owe my gratitude
to the Penn State students, faculty, staff,
alumni and friends who have stood with us and continue
to do the daily work that is critical
to an institution such as this.
I thank the members of the Board of Trustees
for putting your confidence in me
and I especially thank my wife, Sheri,
for her patience and perspective.
This Board meeting marks a new year
and the new semester at Penn State.
We are poised between our responsibilities
for past actions and our need to move forward as an institution.
Yet as we reflect on the past and plan for the future,
our duties require focusing on the present,
the day-to-day activities that are so vital to the well-being
of Penn State's 96,000 students, 44,000 full
and part-time faculty and staff, more than a million,
half a million living alumni and the people of Pennsylvania,
the nation and the world.
As I told the hundreds of alumni I spoke with last week
in Pittsburgh, Philadelphia and New York City,
I accepted this presidency with the intention
that I would leave Penn State with a commitment
to openness and communication.
I'm actively working to reach out to our constituencies,
to listen, to be more accountable,
and to candidly respond to questions to the extent
that I have the answers,
recognizing that there are still many questions
which remain as yet unanswered.
Let me address the current situation for a moment.
At the press conference
on November 11th I issued five promises
to the Penn State community.
I promised that we will be respectful and sensitive
to the victims and their families
and that we would seek appropriate ways
to foster healing and raise broader awareness
of the issue of sexual abuse.
To that end, the partnership for education and outreach
between the Pennsylvania Coalition against Rape
and Penn State is moving forward
with a $1.5 million fund committed
from Penn State's share of this year's Big 10 Bowl revenues.
We've launched, with additional bowl revenues,
the Center for the Protection of Children
at the Hershey Medical Center Children's Hospital.
The center will be dedicated to the prevention, detection
and treatment of child abuse and the training
of additional physicians in this critically important field.
I've also charged task force to deliver to me
by June 30th a proposal
for a faculty-led university-wide institute
for the study and treatment of child abuse
that will bring together the many
and varied resources of the university.
In this manner, Penn State may contribute in greater ways
to this national and global problem.
We now have in place a sexual assault
and relationship violence hotline that operates 24/7
so abuse or suspected abuse can be reported anonymously
and will be referred
to the appropriate response organization.
In addition, our alumni and students raised more
than $528,000 in support of RAINN,
the country's largest anti-sexual
violence organization.
I promised that my administration would provide
whatever resources, access and information are needed
to support the Special Investigations Task Force
and the work of the independent counsel, Judge Louis Freeh.
As well as the attorney general's ongoing investigation
and all other investigations we continue to provide
such information and access.
I promise that I would provide meaningful and timely updates
and encourage dialogue with students, faculty, staff,
alumni and other members of the Penn State community.
Over the past nine weeks I have met with hundreds
of representatives of each of these groups and listened
to their comments, their concerns and their ideas
for moving forward while respecting the responsibilities
of the past.
This has been a necessary part of the healing process.
I promise that I would reinforce
to the entire Penn State community the moral imperative
of doing the right thing.
In response, we're revisiting a wide array of policies
and programs to ensure that we go above
and beyond the legal requirements.
We're widely disseminating information about sexual abuse
and the reporting of assaults and harassment
so that our faculty staff and students understand the legal
and moral imperatives and how to act in response.
I've had several wide-ranging discussions about the position
of an ethics officer who will serve as a member
of President's Council and will have direct access
to the Board of Trustees.
I will be launching a national search
to fill this position in the near future.
We have also increased awareness
of the university's existing ethics and compliance hotline
so individuals can anonymously report suspected instances
of behavior that do not meet the highest standards
for ethical responsibility.
Finally, I promised that I would ensure proper governance
and oversight existing across the entire university,
including intercollegiate athletics.
We're reviewing numerous areas of the university to ensure
that units are following all applicable university policies
and have the most appropriate reporting lines given the nature
of their responsibilities.
As we address this tragedy, we cannot forget that Penn State is
and has historically been one of America's great universities.
More than a half century ago Penn State was given membership
in the Association of American Universities,
the organization representing the most elite public
and private universities in the nation.
We cannot allow this university and its long and historic legacy
as a leader in higher education to be defined by this tragedy.
Although this may seem like a challenging time to be
at Penn State, it's also an extraordinary time,
one that provides the opportunity to reflect
on the values we hold dear
and to reaffirm our long and storied legacy.
Our institution was founded out of necessity
and a sense of purpose.
The first president, Evan Pugh,
was the son of a blacksmith farmer who left his rural roots
to pursue scientific knowledge and advanced education.
He combined a sense of American practicality and industry
with a bold vision for using science
to improve Pennsylvania's agricultural industry.
When he arrived in Central Pennsylvania
to lead our fledgling institution,
he welcomed students and faculty from humble backgrounds
who were unified in their belief in self-determination,
resilience, hard work and the ideal
that education can change the world.
Penn State has always stood for opportunity and we're defined
by our core mission and activities
that include our commitment
to exceptional teaching and learning.
An $800 million research enterprise
that addresses complex and pressing issues, leadership
and contribution in the arts and humanities, a full range
of extracurricular activities and service and outreach
that has improved countless lives
in Pennsylvania and around the globe.
These things define Penn State and who we are,
and you have given me the great responsibility to ensure
that this is our path forward.
Key indicators suggest that our institution remains
on solid footing.
As of last Monday,
we've received nearly 61,000 undergraduate applications,
a three percent increase over last year's record rate.
Graduate applications are up four percent over last year.
Paid deposits for undergraduate study
at University Park this coming summer or fall are up slightly
over last year at this time.
Paid accepts at the Commonwealth Campuses are down slightly,
but we're still relatively early in the admission cycles.
I'm also pleased to report that information
from Penn State's clear services indicates that interest
in our future Penn State graduates remain strong.
Recent meetings with 31 employers
who have previously recruited at Penn State were held
in Philadelphia, Washington and New York City.
All reaffirmed their strong interest
in Penn State graduates.
To date, nearly 300 employers have registered to participate
in our spring career days representing a 12% increase
over last spring.
In addition,
the people-to-people career fair focusing on service, wellness
and recreation opportunities planned
for late February has twice
as many registered employers this last year.
I believe that organizations who last year ranked Penn State
as a top university from which to recruit graduates realized
that nothing has changed the qualities
of our soon-to-be graduates.
Penn States' research enterprise also continues
to show robust growth.
Research expenditures are up nearly four percent to date
over last year and research awards are up more than 17%.
Notably, research awards are up significantly
in agricultural sciences, health and human development,
and the applied research lab.
In addition, Penn States' funding from the Department
of Energy went up by nearly 61%.
It's a bit too early to assess the impact of events of November
on private philanthropy.
Fundraising programs, by their nature,
often show large variations year-to-year due to a variety
of factors, including large one-time gifts
like the $88 million commitment we received in 2010
that isn't typically repeated the next year.
A better barometer of alumni
and friend giving is the broad support of the Alumni Fund.
To date, the number of donors making gifts to the Alumni Fund,
which is generally contributions of $10,000 or less,
is essentially at the same level as last year,
and the sum of contributions to the annual fund is up more
than ten percent compared to last year.
It's also noteworthy that membership
in the Penn State Alumni Association shows a two percent
increase over last year.
All this said, however, I would be a foolish optimist to suggest
that the year ahead will be without its challenges,
financial and otherwise.
Two weeks ago the university was notified that due
to lagging revenue collections for the Commonwealth,
a freeze on state spending was instituted and five percent
of Penn State's educational and general appropriation,
along with those
of Pennsylvania's other state-related universities,
was being held in reserve
if the state's budget situation doesn't improve over the course
of the next five-and-a-half months.
This amounts to an $11.4 million reduction in funding,
including Penn College.
We're very grateful that our agricultural lines for research
and cooperative extension will not be reduced further.
We're also about to enter what appears
to be a very difficult budget cycle for the Commonwealth.
These financial matters directly influence in-state student
access and affordability,
research in the agricultural sciences,
our ability to offer extension education and outreach services.
In addition, our nation is experiencing sluggish economic
growth and the resulting job insecurities
and financial strains by families have a direct impact
on our students and their ability
to afford a Penn State education.
I believe the great challenge before all of us
in the higher education sector is to define a path forward
that will allow us to improve learning outcomes
for our students, while finding ways to deliver that education
at a rate of cost increases less than we have experienced
over the past two decades.
In short, we must challenge ourselves
to become more effective at what we do,
while simultaneously being more efficient at what we do.
This must be everyone's goal, faculty, staff, administrators,
students, this Board all working together.
We must not retreat from our mission that has endured
for more than 155 years.
We need to use what we have learned
to build a stronger institution and to restore the trust
and confidence that so many people have had
at Penn State for so many years.
In that spirit, I wish
to outline my objectives for the next year.
First, we must always be mindful of the need
for institutional humility, integrity and resolve.
Penn State history has provided many reasons for pride
and praise, but also the need
for reflection and introspection.
We need to focus on academics
which is our core business while retaining the important role
that extracurricular activities has
in educating the whole person
and in building Penn State's spirit and pride.
We must remain committed to fostering economic development
in the Commonwealth of Pennsylvania
and educating its citizenry for our global economy.
Salaries for Penn State faculty and staff haven't kept
up with the cost of living in recent years
and we're losing ground to competing institutions.
Attracting and retaining outstanding teachers,
researchers and staff is of paramount importance.
We must find ways to remain competitive with our peers
and focus on excellence even in these very tight economic times.
Penn State will become a national leader in the research,
prevention and treatment of child abuse.
This issue has been inextricably linked to Penn State
and we must meet that obligation.
We need to restore unity through continuing discussions
and that includes respectful disagreement.
This is a university, one that fosters a diversity of opinions.
We need to build on that foundation and embrace the sense
of community that binds us together.
We need safeguards against the tendency to return
to complacency and business as usual.
We need to learn from the past and ensure
that proper administration, governments, transparency
and oversight exist across the entire university.
We need to find new expressions of gratitude
for the good in our community.
We need to learn and laugh together to restore our spirits.
Our vision for Penn State is the same today as it was when you,
the Board, approved our current strategic plan,
Priorities for Excellence.
Our vision is that Penn State will be a global university,
committed to excellence with a passion for creating knowledge
and educating students to be leaders for a better tomorrow.
And I would add that we want to accomplish this vision
in a sustainable manner.
Our goals have not changed.
We seek to enhance student success,
advance academic excellence and research prominence,
realize our potential as a global university,
maintain access and enhanced diversity, serve the people
of the Commonwealth and beyond, use technology
to expand opportunities and control costs
and generate efficiencies.
Now we must rededicate ourselves, in the midst
of our continuing challenge, to stay on track,
to proceed with our various strategies,
implement fully the recommendations
of the core council review process, and do our very best
to achieve our goals for the current fundraising campaign.
It is, after all, for the future the campaign
for Penn State students.
As Penn State's 17th president, I can declare
that this is our mandate for the future,
but none of us can realize these goals alone.
That will require the energy, commitment and support
of everyone in the Penn State community,
and it's incumbent upon us to succeed.
Penn State has a great deal to contribute.
Much is already in place and this can be our time
to make it so, even in the midst of tragedy.
We need to move forward, we must move forward.
I ask everyone to join me in restoring Penn State's spirit
and renewing our promise to the world.
Thank you very much.
[ Applause ]
>> We do have time for some questions.
Rod, do you want to just stay up here?
Go ahead, Joe.
>> Rod, thanks for that excellent report and thank you
for your terrific leadership over these trying times
over the last few months.
One thing that you mentioned there, a real bright spot,
17% increase in awards.
I assume that's dollar amounts
for research that's competitively earned competing
with other institutions, universities,
that obviously takes a while to ripple into the future money,
but we're already in the top ten
of research universities around the country.
What impact do you think that will have looking forward
over the next couple of years.
>> Well, thank you.
That's obviously an important barometer of things to come.
Research awards, and as you say, these are new dollar awards
for research for the first essentially half
of the year vis-a-vis that same period a year ago.
It's very good news because it reflects a very high level
of confidence in our faculty and in our research programs
and our ability to deliver,
and that increase certainly will find its way.
Some of those new awards are short-term,
some are multi-year and longer terms.
So actually the amount of activity that goes
on will be spread for many years in a lot of cases.
These are no doubt challenging times in terms
of securing external research support.
We know that many of the federal funding agencies
such as the NIH are not increasing their budgets.
We know, for example, that in NIH awards,
and I believe I heard the other day
that the hit rate among proposals is now less
than ten percent.
So these are very strong reflections of the power
and capability of Penn State researchers.
As I mentioned on some of my trips, Penn State ranks third
in industry sponsored research,
and second in defense sponsored research.
Our industry sponsored research, I believe,
has a very bright future as well.
Our vice president for research, Hank Foley, has made a number
of important changes in terms of intellectual property policies
that I think will encourage growth in that area.
So I was very pleased to see that increase.
>> Other question?
>> First, Rod, let me congratulate you
on a great report and charge and challenge to all of us.
One of the things that you mentioned was access
and as a Trustee, I have been concerned
because each year we've had
to increase the cost of tuition here.
Recognizing our land grant mission providing
that quality education, and also recognizing
that both state resources and federal resources are pressured,
are you optimistic that we'll be able to meet that challenge
in becoming more efficient in delivering higher education
or in providing greater assistance?
I'd be interested in your comment.
>> It really operates on two sides, as you suggest.
And that's one of the reasons why I mentioned the campaign
for the future, the campaign for Penn State students.
We're pleased with the progress that we're making there,
but we need even more success in generating funds
for scholarships, and certainly for need-based student aid
because that challenge is going
to become no less in the years ahead.
I think as a university, we're going to have
to consider putting even more of our institutional resources
into need-based student aid.
Penn State has been relatively successful vis-a-vis our peers
and still serving the needs of students of lower income.
Penn State has one of the higher levels
of Pell eligible students at the university.
We are just short of a quarter of our students
who are Pell eligible, which is generally families
in the lower 40,000 range of income.
And we also still have a rather high level
of first generation students to come to Penn State.
So these are important indicators that we need
to keep our eye on to make sure that we're not losing ground
in that challenge to provide access and opportunity.
It's not going to be easy, but I think we have to keep our eye
on that and do everything that we can to make sure both
from a standpoint of philanthropy,
as well as our own institutional aid, and then also operating
as efficiently as we can.
>> Steve?
>> Yes, Sam.
We know that public budgets are extremely stressed local
and state governments and it's not inconsequential
that the AG research
and extension appropriation is being held flat
in this current budget environment
that our commonwealth finds itself in.
This institution is our land grant school,
it's our AG research school, it's our extension school,
and so in the era of budget cuts, it's not inconsequential
that AG extension, or AG research
and extension were held flat and, of course, we owe a debt
of gratitude to the governor for recognizing that.
A question, Rod, not too long ago we completed our strategic
plan and part of that strategic plan caused the administration
to look to cost-saving measures.
Would you just give us a brief update
as to what measures are underway with regard
to our strategic plan?
>> Well, we continue to work on all of those areas.
As you may recall, we put together a,
for lack of a better term,
I would it a responsibility matrix at the end.
So each of those strategies, those roughly 30 some strategies
at the end of the strategic plan has a timeline for it.
It has an administrator or a group of individuals
who are charged with taking that forward.
We continue to get updates on the implementation of the plan.
Things are moving along very well.
For example, we're really now beginning to launch
into some major changes in the way
that we're strategically preparing
for information technology and organizing governance
around information technology.
So almost every one of these areas,
there's a considerable amount of work that's going on.
We've basically completed the core council process in terms
of the review of all of the academic programs and all
of the major units across the university,
and we have implemented a major change that you may recall went
through the Board last fall in terms of the restructuring
of the College of Agriculture Sciences,
so that we're better able to really mesh and prepare
for the future the way our programs are organized.
But we're also in the midst of a major set of activities
that really is directed to how do we deliver programming
about areas of interest and extension
in the 21st Century using all of the resources
that we have available to us, including technology?
How do we focus on certain parts of that portfolio
and still continue to deliver the best set of services
around the Commonwealth?
>> Thank you, Rod.
Maybe I wasn't clear when I was talking
about extension AG research.
Level funding is good news in this environment
of shrinking public budgets,
so I want to again thank the governor for recognizing that.
>> Well, it is and that's why I made particular note
of that in my remarks.
But we also have to understand
that level funding means less programming
because costs are going up in terms of salaries,
benefits and program costs.
So it's good news, but it's still tight.
>> Jesse.
>> Thank you.
Dr. Erickson, I was really struck by your comments
on the use of technology and going forward in the way
in which we can deliver educational programs to students
who would like to come to the university,
but the affordability is perhaps a bar in many,
many cases at here and other institutions as we well know.
But what is your confidence level, at this point,
in the use of that technology that will help
to reduce the cost for the overall cost
for an undergraduate education
for students going forward at Penn State?
How does that plan -- do you make that --
how do you see that role of technology providing
that kind of lower cost base?
>> I think if we do it right,
we can have some positive impact on both ends.
We can improve the learning outcomes in certain ways
and in certain kinds of curricula,
not every curricula is as amenable
to technology enhancement.
But I also firmly believe that the most important thing
that we have to pay attention to in the use of technology
and online learning is quality.
We have consistently been recognized for the excellence
in the way that we deliver online education.
And fundamental to that is the fact
that our faculty developed the programs, oversee the programs,
deliver the programs, and are ultimately responsible
for the quality.
So that, I think, is the fundamental principle
and we will never waiver from that.
We've had lots of suggestions
about how we could expand this very rapidly, and frankly,
faculty capacity is our biggest hurdle in terms of expanding.
But we have never wanted to increase size
at the expense of quality.
Once we lose our brand, our reputation for quality,
we don't have what we need to have to offer online.
But I would certainly agree that we need to look very carefully
at all of these aspects and find ways in which the use
of technology can not just provide increase access,
but also can provide affordability.
>> Thank you, sir.
>> Ann.
>> Thank you.
I would like to just take one minute
to compliment the university administration, faculty,
and staff for pursuing our efforts
as an academic institution over the months of the crisis
that you have also been dealing with
and we have also been dealing with as a Board.
But I picked three things to mention, knowing they may come
up later in your agenda.
One would be for the students.
The opening of the new Knowledge Commons
at the Pattee Paterno Library and the fantastic new efforts
to utilize technology in their learning
and cooperative work together.
Two, the research, the College of Agricultural Sciences,
and this fantastic discovery
of two scientists regarding a possible innovation
in the cure -- reaching a cure for leukemia.
And three in-service, our own university-wide initiatives
to strengthen our help to --
for children who need our help worldwide,
as well as in the Commonwealth and in the country.
The students, the faculty, the staff, the administration
and the Board are reaching out and discovering ways
that we can be using our own resources to help children.
So teaching research service.
>> Well, thank you.
Thank you very much for that comment.
I can't thank our faculty staff and students enough for the work
that they've been doing moving the university forward
in the midst of everything that's happened.
>> Any other questions?
Just a second, I want to see if anybody else -- Jim.
Go ahead, Jim.
>> Rod, one of the things that we were all sensitive
about is obviously the cost of education
and that emphasizes the importance
of private philanthropy, and I think the comments
that you made earlier was very good news,
although early indications,
but the campaign is moving along as we expect.
We're exceeding where we expected to be at this time
and it looks like it's going to be a very successful campaign.
Obviously, during this period of time when you've got a lot
of other things on your plate, the challenges that you've had,
you haven't been able to devote the time
that oftentimes a CEO does do and out calling on billers.
And because of that, the communications
that have been expressed especially by the deans
to their respective alumni, the volunteers that are part
of the campaign for Penn State have stepped up,
particularly Peter Tombros in his leadership,
a person that has almost devoted full time to development efforts
over the last couple months and, of course, Rod Kirsch,
but all the volunteers who have done the exceptional job.
Please pass along our thanks and admiration,
especially to the deans, the faculty,
and especially Peter Tombros and his team
for the great job they're doing.
>> Thank you, I'll certainly do that, Jim.
And I'd also take the opportunity to thank our deans,
and also the members of the President's Council
for the terrific job that they've done.
>> Joe.
>> Rod, you had mentioned admissions and Jesse talked
about technology, but you didn't mention the increase
in the online, the world campus.
Does that continue to increase
at double-digit rates here over the year?
>> Yes, indeed, it continues to increase.
We've had a very strong first half of the year in terms
of additional students.
It will continue to be, I think, the largest growth area in terms
of the number of course enrollments in the student --
the number of students that are participating.
The other interesting part of it is that our own students
in residential education here who are on this campus
or other campuses continue to avail themselves
of opportunities to the world campus in growing numbers.
>> Thank you, very much.
One more, Maryann.
>> Yes, Understand that there's been some work being done
in strategic planning in the field of sustainability
for Penn State and I would love to know when --
well, I'm very excited about this
and I'm sure some other Board members are too,
when we can hear more about the outcomes of the plan.
>> The draft plan I have seen now.
We'll have a chance to meet with the developers of that plan,
and they've had very wide input from a number of individuals
across the university, and I would suspect
that within the next two months we'll be in a position
to bring it to the Board and back to a lot
of other much wider constituencies.
>> Thank you.
>> The governor has a question.
>> Oh, governor, yes, I'm sorry.
>> President Erickson, thank you for all your work since taking
over in a very unusual circumstance.
But I think I would ask you to communicate
to the students what I've communicated to some
of our student leaders here.
I am tremendously impressed by the work of the students
in calming the situation after the events of November.
And unfortunately, I think they've been a lost story
to the media whether it be local, statewide or national,
of their efforts on behalf of the colleagues, the students,
but also on behalf of the Penn State University.
And I think that they deserve a round of applause
from our Board of Trustees.
>> I do, too.
[ Applause ]
>> I couldn't agree with you more, Governor,
they really have set the tone in terms of spirit and moving on
and that the work that they're doing now is focused
on their work, their course work, their other activities,
and [inaudible] in addition.
The students are simply doing a terrific job.
So thank you for that comment.
>> Also, thank you, Governor, I think we all have heard
that over and over this morning as we met
with the student leaders, how they're moving forward
and they're still -- and very proud of this institution.
And, Rod, we can't tell you enough times,
it's said the number of times our appreciation
as you move this institution forward.
Next, President Erickson suggested that it was important,
and we agreed, that we hear from Dave Joyner,
the interim athletic director.
Dave will give us an overview of intercollegiate athletics
and I don't have to introduce Dave to you.
He's a former colleague, and we're, of course,
appreciate to Dave too for his stepping
in as interim athletic director and doing such a great job
in this difficult time.
>> Thanks, Mr. Chairman.
I'm going to give you a report today
on intercollegiate athletics and as a report overview we're going
to discuss our organizational structure,
our institutional control, our recreation services
and support budget, our NC-2A varsity sports,
and I'll give you a brief intercollegiate athletics
financial overview.
In our organizational structure, we have 325 full-time employees,
which includes those that work in recreational services
and support, and those that work directly
in intercollegiate athletics or varsity sports.
The athletic director reports to the President, and is a member
of the President's Council,
the Athletic Director meets regularly
with the Senior Vice President for Finance and Business.
Within our institutional control and dual reporting structures,
the Athletic Director reports directly
to the university President, the Director
of the Sports Medicine Center, reports to the Dean
of the Hershey Medical Center,
Penn State's College of Medicine.
The Director of the Morgan Academic Center reports
to the Vice- President for Undergraduate Education,
the Directors of Athletic Development and Annual Giving,
both report to the Senior Vice- President
for University Development.
The Associate Athletic Director for Finance reports
to the Corporate Controller.
We have monthly meetings with Senior Vice President
for Finance and Business, the Corporate Controller,
the Athletic Director and Associate Athletic Director
for Finance to keep all parties appraised of financial matters.
Intercollegiate athletics does not operate a separate
development function.
Intercollegiate athletics provides funding to admission
and the financial aid office
to oversee NC-2A and Big 10 polices.
We also pay an administrative fee in the amount of 3.5%
of percent prior operating income, that is paid to central.
And all summer camps and clinics are operated
by intercollegiate athletics, however,
and coaches do not own their own camps.
In recreation services and support, general funds --
this is supported by general funds.
Sixty-two percent of our funding is through central funding,
38% of funding is through income generation,
which comes through club sports, our intermural programs,
out fitness programs, and our Pennsylvania State University
Athletic Conference.
Next, you'll see a summary of our general funds budget
with instructional operations, ice rink and natatorium
and tennis center, the student rec including campuses,
club sports, Stone Valley Adventure Recreation,
and administrative support all totaling in a permanent '11
and '12 budget of $5,525,000.
Next is intercollegiate athletics.
This includes our varsity and related operations
which are 100% self-supporting.
We presently have 29 varsity sports, soon to be 31
in fiscal year '12 and '13, with the addition of both men's
and women's ice hockey.
We have 15 programs, which will be 16 in men's,
we have 14 women's programs, soon to be 15.
We have 821 student athletes, which will 885,
and 518 of present athletes receive some type of scholarship
or the Nittany Lion Club support which this will rise to 575
with the addition of our hockey program.s The next couple
of slides just give you an overview
of where Penn State sits just in the volume or the number
of intercollegiate sports that we offer,
and this reflects the addition of hockey which will come
in the next few years as we stated.
Ohio State has 35, we have 31, and then it progresses
down between the other Big 10 institutions
to Northwestern with 19 total sports.
In our financial overview, we make annual reports both
to the NC-2A and the Department of Education due to the Equity
and Athletics Disclosure Act or the EADA.
Football and the Nittany Lion Club generate more than 50%
of the revenue for intercollegiate athletics
and our units must justify budgetary increases
and large salary increases to the Senior Vice President
of Finance and Business.
You'll see a pie chart showing our fiscal year '10-11,
and this was what was submitted per the EADA report.
I'll point that the - obviously, it shows the majority
of football and the Nittany Lion Club Levi Lamb at 37% percent
and 16% respectively, club suites
and club seats are at 12%.
I might comment that the other includes endowment income,
income from our golf course operations, also a category
that we call other endowment or other contributions due to --
that fall outside of the normal contributions
to our development offices, other development contributions
which are -- some people will just write checks
to the athletic department and send them in,
which this is the other piece of this.
Our media sponsorship includes our Learfield partnership
and Big 10 TV would also include our relationships with ESPN
and other TV providers.
In our expense categories they're the same categories
and the other expenses would include those things
that I talked about just a minute ago
and our scholarships 13%, 50% of this is the Levi Lamb
and Endowment operations.
Next slide gives you an overview of fiscal year '09/10 and '10
and '11, and you note that we had a net reserve transfer
after operations of 2.9 million and 2.6 million
in those two years respectively.
Next slide will show that reflection on our reserve
and our reserve balance as you'll see went up from '09/10
from 17.5 million to 20 million plus after fiscal year '11.
The next slide shows a projected budget for fiscal year '11
and '12 with a projected transfer from reserve
of a net negative $5 million.
The two reasons for this are a one-time football transition
costs with primarily severance pay
for our outgoing football coaches that are not --
that are no longer with the program
and also the other large item is self-funded capital projects.
You'll see in that second line which includes the move
of lacrosse fields which are approximately 4.3 million
and installation of video control systems
for our large venues at $2 million as well
as the Bryce Jordan scoreboard at 1.3 million which enters
into that $9.3 million figure.
And the next slide, which is the last slide corresponds
to one just a couple ago showing our net transfer
into our reserve and our net reserve balance projected
at the end of fiscal year '11/12 of $15,180,000.
With that, Mr. Chairman, concludes my report.
>> Thank you, Dave.
>> Dave those revenues are projected to be down,
I just wondered what the reason for that?
>> Revenues are down but they're more in a more normal rate.
We had a big bump because of the renewal for suites
and club seats which occurred in that year prior.
>> Yes, I noticed the lower figure was similar
to the prior year.
>> Correct.
Yes, sir.
>> David, do you happen to know what women's sports
at Ohio State, they have about three women's sports more
than we do, what they are?
>> Actually don't know what those are.
I wonder, does that -- Rick, do you have?
>> Crew I believe is one of them and, well,
at the time they had women's ice hockey but we're comparable
to [inaudible] everyone's ice hockey as well.
They may also have a -- they may have [inaudible] I'm
not positive.
>> We can find out for you though, we'll find out.
>> Stephanie?
>> Dave, first thank you for stepping up
and for all your support in taking this leadership role.
We've missed you on the board but I'm very happy
to have our athletic department in your capable hands.
>> Thank you.
>> My question is with regard to what you have reported
on with regard to meetings and various things,
can you tell me what, if any changes you have made
since coming into this position.
>> Well, I can tell you what we're paying attention to
and that'll reflect perhaps, you know,
an organization can always get better
and I think we've had a very, very good organization
from my viewpoint in the last two months.
But the things that we're paying attention
to as we're going forward are things that have to do
with safety, security for our athletes and staff
and there are new or updated security measures
at the Bryce Jordan Center which we work in collaboration,
we're a tenant there, but we work in collaboration
with the Bryce Jordan Center staff.
We're also working with our sports medicine staff,
that's a safety and security issue in my mind as we're trying
to streamline and make the delivery
of athletic performance services or athletic development
in sports medicine merge in a uniform way
to really benefit our athletes and prevent injuries as well
as increase their ability to participate.
We're also working daily with adherence to the Clery Act
and making sure that we're doing everything possible for all
of our staff to understand that are responsibilities with that.
>> Linda?
>> Is there any indication that we've lost any sponsorship,
commercial sponsors or agreements
with any -- for football program?
>> I believe at this point,
and we're always continually monitoring that,
I believe we've lost one sponsor but that may have been one
that was up for renewal.
And we're continuing to meet with our sponsors on road trips.
We've just completed one and we're going
to be doing several more over the next few weeks
to help ensure our communication with them is very good.
>> Over here, I'm sorry, Al.
>> Hey, great.
I want to congratulate you too
because the transition has gone really well.
We haven't lost any recruits
that I can see since the first two.
But how many programs are, I think it's good for everybody
to know, how many programs are self-sufficient,
the athletic departments independently that don't have
to take any money out of the university other than us?
>> I don't think it's a very big number.
I don't have the exact number, maybe two more I'm told
by Rick Kaluza who's our Director
of Financial Operations, there's only two, other than ours.
>> [Inaudible]
>> Oh, how many athletic programs are self-funded.
>> Between 10 and 12.
>> Ten and 12.
>> Nationwide.
>> Nationwide now he's talking about.
>> I thought the question was our sports within Penn State.
>> Oh, yes, we have two sports that self --
football and basketball are the major income generators
within Penn State.
But 10 to 12 nationally.
>> I mean nationally.
>> Nationally, ten to 12.
>> Jay?
>> Could you talk a little bit about the impact
of recent events on the athletic program, the morale of the staff
and the students and what kind
of reaction there's been to the new coach?
>> The morale has been steadily increasing.
When I first came on board the horseshoe was right
in the middle of all the things that were going on
and we've worked together to focus on our core mission.
Our core mission is success with honor.
And we still have always believed in that,
we've never veered from that and my initial job, I felt,
was to keep us focused on that mission
so that everything goes back to that.
We continue to do that and we're continuing now to ramp
up how we can better fine tune our delivery services.
I think we have a very good organization as it stands.
Like I said, we can always get better so one
of the projects early in this year is
to fine tune those delivery systems to help us carry
out that mission and translate that into integrity, academics
and national championships on the field.
So hopefully that answers the first part of that question.
The second part, the --
having Coach O'Brien on board has been a positive influence
on the staff.
They feel that that's a milestone in moving forward
and keeping our programs adherent to our expectations
that have always been, haven't changed
and Coach O'Brien I think if you saw the news conference,
has reemphasized that he's here
to build upon a great tradition that's already here established
by those that came before him
and that's had a very positive influence on the team as well
as other athletes and staff.
>> Any other questions of Dave?
>> Would you speak
about football recruiting a little bit.
Obviously personally I'm on the one hand rooting for O'Brien
to go through and win the Super Bowl because I think
that will be a positive thing.
On the other hand, obviously it stands in the way
of his possibly recruiting.
So can you talk a little about that?
>> I guess that's the proverbial conundrum, right?
It's -- I think number one, recruiting seems
to be going very well.
There have been, to my knowledge, no new recruits
that we've lost, verbally at least
because signing date's not 'til February 1st,
and my communications with both Coach O'Brien
and other staff are that the interactions seem
to be very positive with recruits.
So that's number one.
Number, I personally, when we came
into this Coach O'Brien said he had a commitment and we wanted
to honor that commitment to the Patriots
and I felt that's a positive thing.
And so we respected that, and we respect him wanting to do that.
Personally, I think it would be great if he won the Super Bowl.
Obviously it's a double-edged sword and the TV, I think,
at the last game said,
this seems to be a three-hour advertisement
for Penn State recruiting during the game.
And my guess is it certainly didn't hurt,
and if they have a good game this week,
I think it's not going to be hurtful to us.
>> Any other questions of Dave?
Again, Dave, thank you.
>> Thanks.
>> Very much.
[ Applause ]
>> We're going to take a break now for lunch at this time
and we'll re-adjourn at 1:15.
So the room will be secured.
You're welcome to leave your belongings
and the full Board is recessed at this moment.