MINUTES OF THE MEETING OF
THE COMMITTEE TO STUDY THE FUNDING
OF HIGHER EDUCATION
A meeting of the Committee to Study the Funding of Higher Education (created as a result of Senate Bill 443 - 1999) was held at 9:30 a.m. on March 2, 2000, at the Legislative Building, 401 South Carson Street, Room 4100, Carson City, Nevada. The meeting was video-broadcast to the Grant Sawyer State Office Building, 555 East Washington Avenue, Room 4401, Las Vegas, and to the Great Basin College, 1500 College Parkway, Elko, Nevada.
COMMITTEE MEMBERS PRESENT:
Senator Dina Titus - in Las Vegas
Assemblyman Joseph E. Dini
Assemblyman Richard Perkins
Assemblyman Bob Beers - in Las Vegas
Regent Jill Derby
Regent Doug Seastrand - in Las Vegas
Regent Steve Sisolak - in Las Vegas
Dr. James Richardson
Don Snyder - in Las Vegas
John P. Comeaux
Dr. Carol Harter - in Las Vegas
Dr. Joseph Crowley
Senator William J. Raggio (Excused)
Senator Randolph Townsend (Excused)
Dixie May (Excused)
Dr. Richard Moore (Excused)
Brian Burke, Senior Program Analyst
Mark Stevens, Assembly Fiscal Analyst
Dan Miles, Senate Fiscal Analyst
Brenda J. Erdoes, Legislative Counsel
William B. R. Daines, Deputy Legislative Counsel
Joi Davis, Committee Secretary
GUESTS IN ATTENDANCE:
In Carson City:
Tom Anderes, University and Community College System of Nevada (UCCSN)
Allen Ruter, Community College of Southern Nevada (CCSN)
John Richardson, Truckee Meadows Community College
Pat Miltenberger, University of Nevada, Reno (UNR)
Bob Dickens, University of Nevada, Reno
Sherry Blunt, University of Nevada, Reno
Lane Simonian, Truckee Meadows Community College
Mike Sauer, University of Nevada, Las Vegas
John Case, Desert Research Institute
Stephen Wells, Desert Research Institute
Ashok Dhingra, University of Nevada, Reno
Bruce Shively, University of Nevada, Reno
Kim Snow, University of Nevada, Reno
George Scaduto, University of Nevada, Las Vegas
Carol Lucey, Western Nevada Community College (WNCC)
Dane Apalatequi, Western Nevada Community College
Bob Silverman, Community College of Southern Nevada
Michelle Dondero, Western Nevada Community College
Andrew Clinger, State Budget Office
Ginger Davidson, University of Nevada, Reno
Linda Pierson, University and Community College System of Nevada
Fred Davis, Desert Research Institute
Helaine Jesse, Western Nevada Community College
Carl Diekhans, Great Basin College
Exhibit A Meeting Notice and Agenda
Exhibit B Attendance Roster
Exhibit C Meeting Packet
Exhibit D Overhead Displays used by Dr. Larry Leslie, Consultant
Exhibit E-1 Revised Table 3-UNLV Peer Group Comparisons, provided by
Dr. Larry Leslie, Consultant.
Exhibit E-2 Revised Table 4-UNLV Peer Group Comparisons, provided by
Dr. Larry Leslie, Consultant.
Exhibit F Information on Land Grants and Medical Schools, provided by
Dr. Larry Leslie, Consultant.
Exhibit G Supplemental Table for UNR Peer Group Comparisons, provided
by Dr. Larry Leslie, Consultant.
Exhibit H Alternative to Site Visits, provided by Dr. Larry Leslie, Consultant.
NOTE: All Exhibits are on file at the Research Library and Fiscal Analysis Division of the Legislative Counsel Bureau.
Assemblyman Richard Perkins, Acting Chairman, called the meeting to order at approximately 9:45 a.m., noting a quorum of the Committee was present.
2. Working Group Status Report
Acting Chairman Perkins acknowledged and thanked the Working Group of the Committee for their diligent efforts.
Dr. Thomas Anderes, Interim Chancellor, University and Community College System of Nevada (UCCSN), stated that after the last meeting of the Committee on January 27, 2000, he was directed to supply the consultant, Dr. Larry Leslie, with the issues, concerns and current information from the institutions within the system, for Dr. Leslie’s additional consideration of peer comparison data.
Dr. Anderes directed the Committee to the meeting packet (Exhibit C, Tab 2), which outlined the suggestions of the institutions to Dr. Leslie. Dr. Anderes noted that Great Basin College (GBC), Community College of Southern Nevada (CCSN), Truckee Meadows Community College (TMCC) and the University of Nevada, Reno (UNR), generally accepted the peers identified at the January 27, 2000, meeting, with some minor considerations.
However, Western Nevada Community College (WNCC) asked that the following factors be considered:
· Size of the service area – WNCC has a large service area including multiple sites with some sites having full services. Therefore, comparable institutions should have similar characteristics.
· Location – WNCC has a close proximity to an urban center (Reno) so comparable institutions should be selected that have similar economic growth and a similar “cost-of-living” approach.
Dr. Anderes stated that the University of Nevada, Las Vegas (UNLV) identified several concerns:
· Growth Patterns – Comparable institutions should have similar growth patterns to UNLV.
· Professional Programs – In the past three to four years, UNLV has been adding professional programs, so comparable peers should include institutions with similar professional programs or institutions that have multiple doctoral programs.
· Enrollment – Comparable peers should have FTE figures above 10,000.
· Size – UNLV resides in an area of over 1 million people so peer institutions should be in a similar population base.
· Research Expenditures and Endowments – Comparable institutions should be similar in the area of research expenditures and endowments.
Dr. Anderes stated that Dr. Leslie was also directed to identify peers for Desert Research Institute (DRI), realizing how difficult that would be due to the uniqueness of that institution.
Dr. Anderes mentioned that institutions would like the Committee to consider whether the peers, once selected, could be reassessed in the future as changes occurred.
3. Selection of Potential Peers for on-site Review
Acting Chairman Perkins thanked Dr. Leslie for the format in which the peer selection information was provided to the Committee. Dr. Leslie replied that he was appreciative of the extra time he was given which allowed the information to be supplied in a summary format. Dr. Leslie thanked the Working Group of the Committee for their assistance and for the feedback that was provided through the Working Group from the institutions. He assured the Committee that the input he received was provided in such a way that did not improperly influence his work.
Dr. Leslie opined that the second set of peers (Exhibit C, Tabs 3a-3h) selected for the institutions were more comparable peer groups than those identified at the January 27, 2000, Committee meeting.
Dr. Leslie cautioned the Committee on how the information on peer groups was to be used in that a single set of peer institutions was not satisfactory for all instances.
Dr. Leslie began to explain the process used to establish peers (a copy of the overhead displays are attached as Exhibit D. He stated that the “screening” process included limitations on how many institutions could be included in a peer group. The first criteria used to establish the peer groups provided approximately 15-20 institutions. As additional criterion was included, the peer groups became defined. He explained that the basic screens used by the consultants were identified by the language in the Agreement. For instance, Programs was listed as the first criteria. Then, the programs must be sorted in order to be as compatible as possible. During his analysis, Dr. Leslie explained that the programs were divided into high, low, and middle-level programs.
Dr. Leslie stated that he would like input from the Committee on the best way to update the information that has been obtained from the screening process. He said that ultimately the issue that guides peer group comparisons was financial. Although that has not been identified as the major reason for the Committee requesting peer group analysis, the overriding issue was financial in nature.
Dr. Anderes stated that the Committee may wish to identify the purpose for using peers. He stated that the equity study that was performed about one year ago was generated because of concerns regarding equitable distribution of resources. That study revealed that institutions could not be adequately compared or placed into peer groups (UNR and UNLV). The equity study showed that one institution was receiving more funding per student than the other. The equity study went through many factors and found differences between the institutions that pointed out the differences in the programs and mission between the institutions. As a result, the two institutions belong in two different peer groups and should not be compared to each other.
Dr. Anderes opined that a primary reason for developing peers was to first place all of the institutions into groups that make sense with the programs, missions and factors included in the Agreement. Secondly, as new formulas were created or existing formulas were revised, identifying particular needs within the formulas would be accomplished and peers could assist in that exercise by viewing comparable institutions, generally, as to what those peers did either in aggregate or individually. Dr. Anderes stressed that when five or six institutions were identified for each of the state’s institutions, then those institutions could easily create a significant database regarding the comparability of the peer groups. He concluded that the peer comparison data was supplemental information that would assist the institutions in building and justifying budgets.
Dr. Leslie stated that according to the Agreement, the primary screening for peers also included enrollment, with an emphasis on instruction, research and public service. Additionally, he has been asked to collect data on finances, instruction and facilities. Dr. Leslie informed the Committee that he has yet to obtain information on facilities because he has been unable to identify a source to use for that purpose.
Dr. Leslie stated that in order to reduce the peer possibilities, variables were added and that often resulted in conflicts or special problems. For example, the Working Group pointed out that for UNR, the peer selection should consider a screening for land grant institutions as comparable peers. Although that was a valid suggestion, it created problems with the screening for medical schools.
Reviewing the first set of changes for peer groups, Dr. Leslie directed the Committee to Tab 3C of the meeting packet (Exhibit C). In relation to the peer groups for UNLV, he noted that three issues were raised:
· New Programs
Dr. Leslie opined that the equity issue was important to him because in the first set of potential peers he presented, equity was not a consideration. In fact, the first screenings for UNR and UNLV were very different. For instance, for UNLV, the 1994 Carnegie Classification system was used and that immediately identified approximately 20 potential peers. However, in 1994 UNR was classified as a Doctoral II institution with a medical school and that screen only identified two other institutions. Therefore, in order to obtain more peers for UNR, the Carnegie Classification was increased to Doctoral I, which did not produce many more institutions, so the Carnegie Classification was increased to the Research II category. From an equity standpoint, UNR was being compared with more liberal institutions but UNLV was not similarly considered.
During the second attempt to identify peers, Dr. Leslie stated that the Carnegie 2000 classifications were used (Exhibit C, page 22). The Carnegie 2000 Classification system was more simplified even though it was driven from the number of doctoral degrees granted. That brought both UNLV and UNR into the Research II category. Dr. Leslie noted for the Committee that he was not certain how Carnegie would be identifying “program.” He stated that for the purpose of this study, he identified programs by using the federal program CIP.
Dr. Joseph Crowley, President, UNR, stated that he did not have any problem with the peers selected; however, according to his understanding of the Carnegie 2000 Classification, UNR was a Doctoral Research I institution and data would support that conclusion in terms of the number of doctorates granted and the number of fields to which those doctorates were offered.
Dr. Leslie replied that last summer he worked with the Carnegie Commission on that issue, and at that time programs had not been defined. However, the issue was moot for the purposes of the study in the State of Nevada. Explaining further, Dr. Leslie stated that the list of potential peers for UNR were probably institutions classified in the Research I category so that was not a problem.
Dr. Crowley asked Dr. Leslie to comment on the program definition problem that exists with the Carnegie Classification system. Dr. Leslie responded that the issue involved how “program” was defined. Turning to page 22 of the meeting packet (Exhibit C), Dr. Leslie stated that one of the classifying decision rules was to have a certain number of degrees across 15 disciplines. He clarified that he meant disciplines, not programs. He said CIP codes were used for disciplines and he was unsure what would ultimately be decided regarding disciplines.
Dr. Leslie stated that the second set of peers for UNLV were more compatible and equitable peers because expanded attention was given to the screens. He found that there was a poorer match on programs and enrollments, but there was a better match on the financial indicators. Dr. Leslie explained that it was not proper to include as primary screens the financial indicators (comparative revenues and expenditures per student) because the information would only be used for financial purposes. Therefore, the financial information was used after the screenings were performed and potential peers were identified. The peers would be viewed to determine whether the institutions were comparable in terms of financial structure.
Dr. Richardson asked Dr. Leslie to discuss the issue of “weighting.” Dr. Leslie answered that two approaches were taken in respect to the program structure. First, he looked at the distribution of programs among the high, middle and low-cost categories. The other approach was to look at the program in terms of the cost of the program along with the number of students enrolled in the program. The proxy for the size of the program was the number of students graduated from that program. So, the weighted figure represents the size of the program as measured by a proxy for enrollments in the program.
Dr. Leslie opined that both weighted and non-weighted figures should be considered because either one of them could be faulty. This is because a program could be very small and enrollments in a program was the driving force for costs so it would be expected that the larger the enrollments in a program, the less important the cost consideration was. He reminded the Committee that the primary screen was the weighted figures; however, non-weighted figures were used next to the weighted as a related and secondary screen so both screens should be reviewed. Dr. Leslie commented that, generally, a better comparison is shown from the non-weighted screens.
The Committee recessed at 10:20 a.m., to reconnect the video-broadcast to the Las Vegas and Elko sites. The Committee reconvened at 10:30 a.m.
Dr. Leslie stated that the Working Group raised issues relative to the amounts of research and the amounts of endowments in the proposed peer groups. He found that for the present peer group, UNLV was below the average of the mean on research and above the average on endowments.
Chairman Perkins asked Dr. Leslie to note for the record the revisions to Tables 3 and 4 for the UNLV comparison, which was provided to the Committee recently. Dr. Leslie explained that he provided revised Tables 3 and 4 (Exhibits E1 and E2, respectively) in order to correct numbers that had been transposed in the original tables contained in the meeting packet.
Chairman Perkins asked whether the Committee had any questions regarding the peers selected and the tables for UNLV.
Directing the Committee to the revised Table 3 (Exhibit E1), Regent Sisolak pointed out that the column at the bottom of that table, “UNLV percent difference from excluded average,” UNLV’s total expenditures for that column is –8 percent. Dr. Leslie explained that UNLV, against all seven of the proposed peers and alternate peers would be funded at –8 percent less than the average of all seven of those.
Senator Titus commented that for the past two days she has been receiving numerous documents via facsimile and that was confusing and did not allow the Committee members to absorb and review the information in a manner suitable for the meeting. She suggested that the materials be provided to the Committee in a more organized fashion and that would make the process easier. Dr. Leslie apologized for the errors that were made which caused the revised documents.
Dr. Leslie stated that the major issue brought forth by the Working Group was the matter of providing land grant peers. Dr. Leslie provided a handout relating to land grant institutions (Exhibit F). Dr. Leslie stated that six of the seven potential peers are land grant institutions. Dr. Leslie said the issue of land grants led to different peers and many of the institutions that were found to be comparable were considerably larger institutions than UNR, which could place UNR at a disadvantage because larger institutions capture economies of scale better.
Dr. Leslie opined that he was unable to locate good, comparable peers for UNR so he cautioned the Committee on decisions that were made based on the peer analysis. He stated that UNR was a complex institution, given its size, which ultimately increased costs. He indicated that the final selection of peers for UNR might be less valid technically, but that was solely based on the issue of whether the land grant should take priority over other factors. However, Dr. Leslie went on to state that although the new selection of peers for UNR did improve the match regarding land grants, a slightly poorer match was obtained on the program basis, enrollments, and revenues and expenditures. He stressed that the enrollment differences made comparisons difficult.
Acting Chairman Perkins asked whether the Committee had any questions on the potential peers for UNR
Speaker Dini pointed out that he received a fax that identified the University of North Dakota as an alterative peer for UNR (Exhibit G). He asked whether the University of North Dakota could be included in the primary list instead of the alternative list.
In response to Speaker Dini, Dr. Leslie explained that a couple days before the meeting, he spent some time reviewing all of the institutions in three quarters of the states. He left out states that were culturally and socially dissimilar to Nevada. He went back through the land grant institutions and the medical schools and found that the University of North Dakota could be substituted as a peer for UNR. Dr. Leslie noted that the University of North Dakota was not a land grant institution, but it did have a medical school and has a more comparable enrollment to UNR and cost structure more similar to UNR. He stated he thought that the University of North Dakota should be considered, but he was not necessarily recommending it.
Speaker Dini asked someone from UNR to respond.
Dr. Joseph Crowley, President, UNR, stated that he agreed with the initial list of seven peers identified by Dr. Leslie. In the analysis presented by Dr. Leslie, a comparison was made between veterinary schools with medical schools—noting that in many ways the schools were similar. Dr. Crowley pointed out that three of the institutions on the list had veterinary schools; however, given all the other factors of locating a comparable list of peers, UNR was satisfied with the list as presented, without the University of North Dakota.
Dr. Leslie noted that typically, during the legislative process, medical school funding was separate from the funding of the institution. Dr. Crowley confirmed that in Nevada the medical school funding was a separate appropriation.
Acting Chairman Perkins asked why Auburn University was chosen as a peer for UNR since it is a land grant institution without a medical school, and has double the enrollment of UNR. Whereas, the University of North Dakota was not a land grant but has a medical school and has a more comparable FTE enrollment.
Dr. Leslie answered that he attempted to respond to the Working Group’s concern—that land grant institutions be a driving factor in the screening process. He admitted he was concerned with the size of Auburn University as it was a much larger institution than UNR.
Regent Sisolak, directing his question to Table 3 for UNR peers, asked whether UNR had a percent difference from the excluded average of 24 percent greater than its peers. Continuing, Regent Sisolak pointed out that a subsequent facsimile he received regarding the land grant and medical school issue as it related to UNR (Exhibit F) stated, “Kansas State’s vet school enrolls approximately 400 students; it’s budget exclusive of foundation and sponsored research is $22 million. Comparably, UNR’s medical school enrolls about 200 students, and its budget is approximately $50 million). Of course, UNR also has a vet school).” Regent Sisolak asked when UNR established a vet school. Dr. Leslie stated that was an error. He went on to explain that when he was working through the websites on the information for medical schools, vet schools and land grants, the websites for UNR appeared to show a vet school was at that institution. However, he has since learned that the program at UNR was a pre-vet program.
Regent Sisolak asked whether the size of the medical schools was taken into consideration within the screening process. Dr. Leslie replied that the size of the medical schools was not a factor.
Regent Sisolak asked how many of the UNLV peers had dental schools. In response, Dr. Leslie stated he did not know. Regent Sisolak asked Acting Chairman Perkins if that information could be provided and Mr. Perkins indicated the consultant could look into obtaining that information.
Mr. Snyder, referring to Tables 3 for UNR and UNLV, noted that the peers for UNR under “full instruction” reflected a broad range of numbers. Whereas, the “full instruction” figures for UNLV were not broad at all. He inquired into the basis for such differences and whether the differences were a significant factor in defining the accuracy of the peer groups.
Dr. Leslie reiterated that UNR did not have excellent peer groups, and there was substantially more disparity in a number of the categories. He went on to state that UNR was a unique institution because it was a relatively small institution with a complex curriculum.
Mr. Snyder commented that the fundamental issue was whether peer groups should be used at all. He acknowledged that initially he spoke to the benefits of peer group analysis in order to obtain a better idea of the numbers involved; however, a peer analysis was only as good as the ability to define peer groups. Mr. Snyder noted that there were substantially more problems than he expected in defining peer groups for both UNR and UNLV.
Dr. Leslie opined that locating peer groups for UNLV was less difficult than UNR. In addition, from a state policy perspective, the state could easily focus only on the state financing part of the peer group work.
Dr. Harter said that if the dental school at UNLV, which was only in its first year, continued to develop into a full-fledged dental school, that could result in no identifiable, comparable peers for UNLV as well. That is, UNLV would have a law school, a dental school, an architecture school, physical therapy and occupational therapy programs without a medical school, and there couldn’t possibly be many comparable peers.
Dr. Leslie recommended that the Committee review the peer groups every five years, particularly considering that Nevada is the fastest-growing state in the country. Further, Dr. Leslie reiterated that it was his understanding that the primary purpose for the site visits was to obtain the most recent data and, with that information, take a final look at all of the peers.
Dr. Harter pointed out that the peers selected for UNLV included only two institutions with law schools. So the same criteria for a professional school “fit” did not seem to affect UNLV as much as UNR. Dr. Harter commented that Dr. Leslie repeatedly said that UNLV had more compatible peers; however, UNLV’s law school was not given as much weight as UNR’s medical school in the screening, nor did he take into consideration that UNLV was building a dental school. She stressed that the selected peers for UNLV were not such a good “fit” as was suggested.
Dr. Crowley reminded the Committee that the issue for UNR regarding peer comparisons was complexity of program, in relationship to the size of student population. He stated that although the question of peers might be complicated for UNLV because that is a large institution, he hoped that did not become the basis for decision-making. Since UNR has low enrollment compared to other institutions, including UNLV, there was significant consideration relating to economies of scale.
Acting Chairman Perkins asked the Interim Chancellor how the peer group analysis would affect the funding formulas. Dr. Anderes answered that until the Committee finalized activities relating to the formulas, the outcome would be unknown. However, to this point, the Committee has been looking at creating formulas, reviewing the existing formulas and exploring new formulas, without any relationship to peers and that was good. Dr. Anderes said the reason for establishing peers was not to replace the formulas, or in any way diminish that task. Instead, peer groups were designed to provide a limited target of institutions for each of the Nevada institutions, so those institutions can make comparisons relating to budgets, programs, and other factors. While it was logical for the Committee to dwell on Table 3 of the information provided by the consultant, and the equity issue has been reviewed for the past three years, there were reasons for the differentials between UNR and UNLV.
Dr. Anderes stated he was not taking Table 3 and using that as a primary mechanism in funding of budgets. In conclusion, Dr. Anderes stated that the development of formulas by the Committee would not be tied into whatever peer groups were established.
Acting Chairman Perkins thanked Dr. Anderes, and asked the Committee to adopt that perspective in relation to proceeding with the information received by Dr. Leslie, and the proceedings for the future meetings. He stressed that equity would always be an issue, but that was not the focus of establishing peers. In fact, at the last Committee meeting, Dr. Pickens, confirmed Dr. Anderes’ comments—that the formulas had nothing to do with the peer analysis. So, as the Committee moved forward, it was important to be reminded of that. If the concern was how the formulas would be developed, then those disagreements should be set aside and the peers could be handled in a different fashion.
Mr. Snyder commented that if peer groups were not serving a primary purpose, and there was such difficulty in establishing peers, then why was the exercise being performed at all? Additionally, he asserted that the peer analysis should reflect the current status of the institutions, as well as future projections of the institutions. Mr. Snyder expressed concern that the conversations that have developed as a result of the peer comparison data provided by Dr. Leslie have implications that may direct the Committee down the wrong path resulting in the possibility of a two-tiered structure between the two universities, and the Committee might not want to establish that policy.
Mr. Snyder stated that as a resident of Las Vegas and a former resident of Reno, it was extremely important that the state recognized there were two quality institutions. On a personal note, he explained that currently he spends much of his time raising funds for UNLV so the suggestion of a 2-tiered structure was not palatable from a fund-raising point of view.
Acting Chairman Perkins pointed out that when the legislation was crafted during the 1999 Legislature, peer analysis was suggested, almost demanded, by the institutions in the system, not the Legislature. In addition, the Committee was not suggesting at two-tiered system, and that could only occur if the Committee allowed such to happen in future meetings. The peer analysis would be more beneficial to the institutions in their deliberations on creating formulas.
Continuing his presentation, Dr. Leslie turned his attention to the peer analysis for the community colleges. He stated that the initial screening for the community colleges differed from that of the universities. There were three financial models across the country for financing community colleges: 1) Total reliance on state funding (Nevada); 2) Majority reliance on local funding; and 3) A combination of mixed state and local funding. Dr. Leslie explained that an important decision in the screening for community colleges was not to include institutions that did not rely substantially on state funding. For example, Arizona institutions were not considered since those institutions are heavily funded through local support.
Great Basin College
Dr. Leslie stated it was his understanding that Great Basin College (GBC) generally accepted the peers he provided. He said the second group of peers included one change, which was to substitute Treasure Valley Community for Rogue Community College as a primary peer. Dr. Leslie stated Treasure Valley Community College was closer to GBC on enrollment, the number of faculty, and expenditure and revenue structures were more closely aligned with GBC. In addition, the enrollment changes at Treasure Valley provide some balance with the other peers within the peer set for GBC. Dr. Leslie said by changing Rogue Community College to Treasure Valley not much was lost; however, Rogue was a closer fit relating to program costs structure.
Dr. Leslie related that the Working Group raised two other issues regarding the peer selection for GBC:
· Whether Baccalaureate Degrees were offered – Dr. Leslie said he found that most of the colleges that might be considered “good peers” that also have a baccalaureate program were branch campuses of universities, so those institutions were not included.
· Comparable Service Areas – Dr. Leslie said this issue could be reviewed in more depth when the site visits were performed. He noted that a comparable data set was located for GBC. However, if the Committee so directed, he could obtain information on the service area for the peers by contacting them directly.
Acting Chairman Perkins recognized Regent Sisolak in southern Nevada. Regent Sisolak indicated his question did not relate to GBC, but rather to the issue of peer groups. He asked whether the peer analysis prepared by Dr. Leslie reinforced the equity study prepared by MGT of America, Inc.
In response, Dr. Leslie stated he was not completely familiar with the specifics of the MGT study so it would not be appropriate for him to comment.
Regent Sisolak directed his question to Interim Chancellor, Dr. Thomas Anderes. Dr. Anderes asked whether Regent Sisolak was specifically directing his inquiry to Table 3 of Dr. Leslie’s analysis, and the general outcomes of the 24% greater shown for UNR and the –8% shown for UNLV under those charts. Regent Sisolak agreed that was his main concern. Dr. Anderes stated from his standpoint, someone could look at the data provided by Dr. Leslie and come to the same conclusion as the MGT study reflected. However, to get the same conclusion a different set of peers needed to be identified. He reminded Regent Sisolak that MGT of America, Inc., was asked to determine how similar and dissimilar UNR and UNLV were in terms of making comparisons. The results of the MGT study showed that the differences between UNR and UNLV were programmatic in nature. So, if the financial data was accepted literally, it would confirm, in a general sense, what the MGT study concluded. However, Dr. Anderes stressed that what was important from a system’s standpoint was that the peer analysis by Dr. Leslie would allow the institutions in our state to look at peers that were programmatically and geographically more similar than just comparing UNR and UNLV to each other.
Regent Sisolak stated that his understanding at the time of the MGT study was that since it was difficult to compare UNLV to UNR based on programmatic differences and a multitude of considerations, peers were designed which ultimately led to the final conclusion by MGT. He stated the same thing was done with Dr. Leslie’s peer analysis, reaffirming that the two universities cannot be compared to each other, but can be defined to like peer groups.
Dr. Anderes informed the Committee that care should be taken when comparing UNR and UNLV to a set of peers in that a broad conclusion could be drawn that would confirm the results of MGT equity study. However, the peer analysis prepared by Dr. Leslie was of particular value because of the information on components by functions. For example, comparisons were drawn when looking at the public service function for UNR as to what was incorporated into that function as operated by a land grant institution that was different than the other peers. The data could be analyzed in more detail in order to compare the institutions and look at each component individually and together; that type of data was helpful as supplemental budget information.
Senator Titus said she appreciated the hard work by the consultants on the peer analysis. However, she did not believe that the southern Nevada constituency cared whether UNLV was “kind of like” Georgia State or Portland, or that UNR was “kind of like” North Dakota. Rather, Nevadans were concerned with whether they received a fair share of Nevada’s tax dollars to support higher education. She asked that the Committee not lose sight of the main objective of the study.
Acting Chairman Perkins thanked Senator Titus for her well-spoken comments. Further, he asked whether there were any additional comments on the peer selection process for GBC, so that Dr. Leslie could continue his presentation.
Ron Remington, President, GBC, commenting from Elko, stated that he, along with Carl Diekhans of GBC would be speaking with Dr. Leslie tomorrow during his site visit to GBC and aside from a couple of minor questions, he was comfortable with the information provided by Dr. Leslie.
On a final note, Dr. Leslie directed the Committee to Table 5 of the GBC analysis, the total revenue per student chart, and strongly advised that the revenue data be used with great caution. He opined that the expenditure data might be more useful for comparative purposes. He pointed out that GBC showed nothing under the category for Auxiliary Enterprises; yet, its peers went as high as $2,000. However, Auxiliary Enterprises did not serve the same kinds of purposes for each institution, nor did that category have the utility of other revenue. Dr. Leslie advised that Auxiliary Enterprises included items such as the student bookstore, residence halls, food services, athletic programs. By definition, Auxiliary Enterprises are “self-supporting” and the costs are set on a break-even basis. Dr. Leslie noted that the auxiliary category was relatively high for the other peers so he would strongly advise that the auxiliary column be subtracted from the total column and that would put the other peers in a more comparative light with GBC. In particular, in the Auxiliary Expenditures and revenues could lead to improper conclusions if not understood appropriately.
Community College of Southern Nevada
Dr. Leslie stated that CCSN accepted the peers identified. However, it was pointed out to him that Broward Community College had a major enrollment decline in the early 1990’s but that has since improved.
Truckee Meadows Community College
Dr. Leslie said it was suggested that the College of Marin be substituted for Central Florida as a peer for TMCC. He stated that the College of Marin was more closely aligned in terms of enrollment to TMCC and the percent of part-time enrollment, and better aligned in revenue and expenditure patterns. However, the College of Marin was not as good of a match on the program cost structure as was Central Florida.
Regent Sisolak said his question related to Great Basin College. According to the chart for GBC (Table 3), was it his understanding that GBC was 4 percent under-funded compared to its peer group, yet it was funded at a greater rate than UNLV, per dollar?
Dr. Leslie said he could not argue that the showing of an institution having more or less money meant that it was better funded because the issue was more complex that that. He added that he had not compared the GBC data to UNLV, and there was a scale issue involved with that conclusion—GBC was a small institution and UNLV was a large institution.
Regent Sisolak asked Dr. Leslie if he stated that more money did not necessarily mean better funding. In response, Dr. Leslie clarified that he was simply responding to Regent Sisolak’s use of the word “under-funded” and a more complex analysis should be performed rather than just looking at the disparity from the mean for the peer group. In other words, when looking at costs, he must answer “costs for what purpose?” Then, an explanation as to the cost differences should be made clear, and that was the key to cost work.
Western Nevada Community College
Dr. Leslie said that he spent a great deal of time on the peer analysis for WNCC, in response to six questions that were posed after the first set of potential peers was submitted. Based on the additional work, Dr. Leslie opined that better matches for the peer groups were obtained. He reminded the Committee of the screening that must occur based on how community colleges were funded, and many other institutions that could have been better matches were eliminated based on funding mechanisms. Dr. Leslie related that he spoke with the President of WNCC about a comparable institution, but that institution was discarded because it was located in New York.
Dr. Leslie said the second set of peers proposed for WNCC resulted in retaining two of the five initial primary peers, and one of the alternate peers. The new institutions have a better percentage part-time enrollment fit than the previous list of potential peers.
Referring to the questions posed by WNCC after the initial set of peers, Dr. Leslie said he paid close attention to those questions, which resulted in better comparisons on those items, but did not necessarily result in better matches on other data. For example, the second set of potential peers resulted in a less comparable fit in the areas of weighted program costs and revenue and expenditures per FTE. Dr. Leslie stated that generally the second set of peers for WNCC are more comparable than the first set of peers; however, the Committee should be advised of the tangibles that exist relating to the six questions brought forth earlier and he would be anxious to hear from the institution as to those concerns.
Dane Apaletequi, Vice-President of Finance and Administration, WNCC, testified that WNCC appreciated the work that Dr. Leslie performed. One concern of WNCC was that it was difficult to find peers with multiple campuses offering a full range of services such as WNCC. He pointed out that in reviewing the peers, one institution stood out as not comparable, Hill College in Texas, which was so far away from the mean that the deviation from the mean was too great, in his opinion. However, Peninsula College in Washington, even though that would result in having two colleges as peers from the same state, would be a better match because the funding from the state was almost exact and the enrollment mix was almost the same. The growth at Hill College was drastic and Peninsula College was more aligned with growth at WNCC. Therefore, Mr. Apaletegui suggested that Hill College at Texas be switched with Peninsula College in Washington. Acting Chairman Perkins thanked Mr. Apaletegui for his comments.
Acting Chairman Perkins suggested that the peer comparisons for each institution be reviewed and, along with the additional information obtained through site visits, the preliminary report on peer analysis could be accepted. He asked Dr. Leslie to comment on his analysis regarding the Desert Research Institute.
Desert Research Institute (DRI)
Dr. Leslie stated that his analysis on DRI was contained in the meeting packet (Exhibit C, Tab 3b). He noted that there were two entries that were incomplete in the information he provided. First, the chart on page 11 of the meeting packet showed “Reno” as the location for DRI; however, he was aware that there was an office of DRI at Las Vegas as well. Second, in the scope of the environmental research activities in which DRI was involved, there were two additional tables that should be included: Environmental Areas of Air and Water Hydrology.
When work on DRI began, Dr. Leslie said he was advised that it would be difficult to find good peers. However, he was satisfied that four fairly good peers were identified. He commented that the fundamental question about peers, and how to use peers, was paramount in the case of DRI. For instance, what state policy decisions would be made when reviewing peer selections for DRI? Since state funding was such a small part of the funding of DRI, that might not be as imperative. The Committee should also decide what should be done with the DRI peer analysis, considering decisions that might be generated based on peer groups.
Dr. Leslie said in locating peers for DRI, he limited the scope to environmental research organizations. Then, he looked at the state’s financial contribution to the research institution and the peers selected were fairly comparable, as was the size of the organization as measured by the size of its budget.
Regarding personnel, Dr. Leslie stated that since DRI was generally larger than its peers the fit was not as compatible; however, a good match was achieved on the number of research personnel at DRI.
Dr. Leslie explained the category “Organizational Location” meant to whom the director reported. In the instance of DRI, the director reports to the UCCSN system office. In three of the four primary peers, the organizations reported to campus heads rather than to the system. Dr. Leslie stated that was discussed with the Las Vegas DRI office staff who made a strong case for reporting to the system office, and the concern for the peers that reported to a campus head should be alleviated to some extent.
In conclusion, Dr. Leslie said he was nervous about how the information on the peers for DRI was to be used because he did not know the direction the Committee was taking in that regard.
Regent Seastrand acknowledged the issues relating to the peer selection process and the use and need of peer group data as discussed by the Committee. In that light, he inquired into whether on-site visits of the peers would actually be necessary. If the institutions did not have a problem with accepting the peers, then he would suggest that instead of Dr. Leslie making on-site visits of the peers, that the Committee accept the peers and proceed with other issues. Then, if it became necessary for the consultant to make on-site reviews because the Committee deemed that to be important, the issue could be revisited. Regent Seastrand suggested that Dr. Leslie be directed to move forward on defining the formulas, or begin some of the other tasks identified by the Committee in his contract.
Acting Chairman Perkins said staff also indicated that on-site visits of the institutions might not be necessary in some instances. The present list of potential peers provides a base of institutions to draw from, should the selected peers meet with at least the majority of Committee approval. He anticipated that there was still a great deal of information to be gathered, based upon the Committee’s current deliberations, and Dr. Leslie could move forward to gather that information via telephone, or the Internet. Acting Chairman Perkins stated if that was the pleasure of the Committee then they could move forward in that fashion or more discussion could be had.
Mr. Snyder expressed concern that if the Committee directed Dr. Leslie to continue with on-site visits or alternative means of obtaining additional information, that would dominate the amount of time spent on that issue, which would not bring the Committee any further to deciding the fundamental question regarding funding equity and the issues to which the Committee was formed.
Acting Chairman Perkins concurred with Mr. Snyder. He stated that the Agreements with Dr. Leslie and Dr. Pickens had particular focuses in order to allow those consultants to complete their work. He noted that not completing site visits would greatly reduce costs for the Committee and would give the Working Group and others more time to focus on the formulas and determine the best method of arriving at the final work product over the next couple of months. Acting Chairman Perkins asked Dr. Leslie if he could accomplish his work by obtaining information by other means rather than site visits (Exhibit H, Alternative to Site Visits, prepared by Dr. Larry Leslie, consultant), and whether there would be a cost savings for the state by refocusing his tasks in other areas, based on the existing language of the Agreement.
Dr. Leslie replied that there would be a cost savings and better information would be obtained with the alternative approach of not performing site visits. He stated that he discussed with staff that if the primary purpose of site visits was to obtain the most recent data and verify data, that could be better performed through telephone calls, etc., at a much less cost—up to two-thirds less. Dr. Leslie informed the Committee that it was his experience that information was not obtained at the actual site visit. Rather, the information was obtained through follow-up communication or website searches and 100 percent response from the peer institutions was not likely. Even with the best follow-up procedures, approximately 80 percent of the information requested would actually be obtained, regardless of whether or not site visits were conducted.
Acting Chairman Perkins asked Dr. Leslie if he would be able to complete his work by the end of March 2000, if site visits were not performed. Dr. Leslie answered that he was confident that he could complete his work within that timeframe, with a one-week window, especially since there were some PhD students available to make some of the contacts.
Regent Sisolak asked the Acting Chairman if he was considering a vote by the Committee to accept the peers, adding that he was unclear why peers were needed at this point. Acting Chairman Perkins replied that it was the charge of the Committee, based on legislation, to create peer groups. He reminded Regent Sisolak that the institutions requested peer groups because the peer analysis would be helpful when making arguments to the Board of Regents during the budget process. He stated that the current list of potential peers was a baseline and could be revised throughout the next month as Dr. Leslie obtained additional data.
Regent Sisolak asked whether the Committee was mandated by the legislation to create peer groups. Acting Chairman Perkins advised Regent Sisolak that the legislation (Senate Bill 443 – 1999) did not explicitly state that peer groups would be established, but the Committee decided on peer groups and that became the basis of the Agreement with Dr. Leslie. Regent Sisolak asked whether it was the Chairman’s intent to vote on accepting the peers.
Regent Sisolak indicated he had another question for Dr. Leslie because he was confused by some of the comparisons. He asked if his understanding was correct that five of the six institutions show under-funding for the total expenditure column, as opposed to peers (Table 3 for each institution):
· UNLV is –8 percent under-funded
· GBC is 4 percent under-funded
· CCSN is 18 percent under-funded
· TMCC is 5 percent under-funded
· WNCC is 2 percent under-funded
Whereas, UNR is 24 percent “over-funded” as opposed to its peers. Dr. Leslie said he viewed those values against the mean as a reference point only and nothing more. In addition, many other factors must be considered when judging “over-funding” or “under-funding.” The very essence of preparing costing studies involved using economies of scale and the relative fit of the peer groups. Therefore, the figures represented in the columns provided in Table 3 for all the institutions was simply a reference point that should generate further review and analysis into all the issues.
Speaker Dini announced that he served on the last committee that studied the funding of higher education in 1986 and that committee was not privy to the technology and expertise that the existing Committee has. He asked whether moving forward with the selection of peers allowed the Committee to better understand the funding formulas and understand how other institutions in other states created funding formulas. Putting aside equity, he asked whether the state could better fund higher education for the next twenty years with the data collected by the Committee?
In response to Speaker Dini’s inquiry, Dr. Leslie answered affirmatively that the peer analysis would be useful in many ways. However, he cautioned that certain data should not be given more weight than other data, nor should decisions be made based on selected data, but everything needed to be considered as a whole.
Speaker Dini commented that the issue was keeping the institutions up and running as quality institutions, with the resources provided. The equity issue was handled in the political arena. The Committee should focus their efforts on maintaining the quality of higher education for the next ten to 20 years for everyone in the state. He stressed that the reason he was a member to the Committee was to follow-up and review what was done in the previous funding study and improve on the quality of higher education in the state.
Dr. Richardson said he has questioned the purpose and scope of the peer group analysis and he appreciated the comments that have been made, including Mr. Snyder’s concerns that the peer analysis could take the Committee somewhere undesireable. However, it was his understanding that the goal behind establishing peer groups was to find institutions comparable to institutions in our state and focus on how those institutions perform tasks that might be problematic in our state’s current budget arrangement and/or funding formulas, i.e., funding technology, research functions, etc., and that information would assist the Committee in either revising existing formulas or creating new formulas.
Dr. Richardson said he was satisfied with the work that has been performed regarding the peer analysis, and as he voted to accept the report on peer groups, he would not be voting to affirm the potential peers as a permanent fixture of Nevada higher education in the future; yet, he was interested in the information that could be obtained from the peer institutions to help the system build formulas that ultimately would better and more equitably distribute the available resources for higher education. He concluded that he believed the peer analysis was a useful exercise.
Dr. Crowley asserted that peer groups were always contentious and rarely was everyone satisfied because there were too many variables to be considered. He was unsure whether the Committee even needed to answer whether the peer groups identified by Dr. Leslie were the right peers. Rather, the peer group analysis provided considerable value to decision-makers in the state, institutions, the Board of Regents, and the Executive and Legislative branches of government. Therefore, the peer analysis was an opportunity to acquire valuable information that would be instructive for the institutions and it would be unwise to pass up that opportunity.
Dr. Crowley requested that the Committee simply vote to accept the report but not approve the peer groups and allow Dr. Leslie to move forward to collect additional information.
Dr. Derby stated she has voiced support for the notion of establishing peer groups and although she agreed with many of the comments made by other Committee members, she believed that peer information was helpful to the institutions. In the past, the UCCSN has attempted to establish peer groups to assist the Board of Regents in looking at issues regarding performance and comparisons. It has already been established that the comparison between UNR and UNLV was problematic so it was better to compare the institutions to legitimate peers. Even though there were problems in establishing peers, Dr. Derby stated that ultimately peer analysis was helpful and valuable for future purposes. Therefore, she would support accepting Dr. Leslie’s report.
Acting Chairman Perkins clarified that his earlier comments should not be construed to indicate that the peer analysis will not be beneficial. On the contrary, he believed the peer group analysis will be of great value as the Committee moves forward to study the funding of higher education. He stated that the primary goal of the Committee was creating funding formulas that reflect equity throughout the state. The peer groups, however, cannot be ignored as the budget process is fine-tuned by the institutions and the Legislature.
Assemblyman Beers acknowledged that if peers could be established then the information would be useful to the Committee. He said he was interested in knowing how states with multiple institutions divided funding between their institutions rather than knowing how Nevada’s institutions compared with their peers.
Acting Chairman Perkins related that the information requested by Assemblyman Beers would be presented at the next meeting of the Committee from the consultant, Dr. William Pickens.
Mr. Snyder emphasized his concern for the Committee moving forward to define peer groups. He stated the comments from the Committee have reinforced that moving forward with peers that were not supported by the institutions either by name or by the concept of how the information would be used, would not be wise.
Acting Chairman Perkins disagreed. He stressed that accepting the report would simply indicate acceptance of the information Dr. Leslie presented and over the next month the institutions could interact with Dr. Leslie and submit additional information. Thereafter, the potential peers could change, based on the additional information.
Senator Titus said that the Committee agreed in the beginning that the Committee should be ruled by consensus because if divisiveness was present between north and south or university versus community college and there were dissenting voices then the Committee’s recommendations at the conclusion of the study would not be legitimate and would be viewed as political, old battles being fought, as opposed to being viewed as a new, positive move forward. She opined that there was a large contingent that did not wish to move forward with the peer groups. Senator Titus commented that if the Committee was divided at this point, what possibly could be accomplished in the end?
Acting Chairman Perkins thanked Senator Titus for her comments and asked whether other Committee members had anything to add. Seeing none, he asked for recommendations on how to proceed with the peers.
Chairman Perkins called a recess at 12:00 noon. The Committee reconvened at 12:20 p.m.
Acting Chairman Perkins thanked Dr. Leslie for the information he provided to the Committee and asked him to attempt to satisfy the institutions that expressed concerns and work with staff as he obtained additional information on the peers. That information could then be relayed to the Committee over the time before the next meeting and that way some information on the progress of Dr. Leslie’s activities can be accumulated. In conclusion, Acting Chairman Perkins thanked Dr. Leslie for his work performed to date.
4. Public Comment
There was no public testimony.
5. Schedule for Next Meeting
Acting Chairman Perkins asked the Committee to look at April 24, 2000, for the next meeting date. That date appearing acceptable to the Committee, it was agreed to schedule the next meeting for April 24, 2000.
There being no further business to come before the Committee, the meeting adjourned at 12:30 p.m.
Joi Davis, Committee Secretary
William J. Raggio, Chairman
Date: ______________________, 2000.