09/17/1981

UCCSN Board of Regents' Meeting Minutes
September 17-18, 1981








09-17-1981

Pages 66-69



                         BOARD OF REGENTS

                    UNIVERSITY OF NEVADA SYSTEM

                        September 17, 1981



The Board of Regents met via a telephonic conference call on

the above date to consider a recommendation that the Capital

Improvement Fee be increased by one dollar per credit for all

UNR and UNLV students, effective Fall semester, 1982.



Members present:  Mr. Robert A. Cashell, Chairman

(Reno)            Ms. Frankie Sue Del Papa

                  Mrs. Dorothy Gallagher



Members present:  Mr. James L. Buchanan, II

(Las Vegas)       Mr. John Mc Bride

                  Mrs. June Whitley



Members present:  Mr. John Tom Ross

(Carson City)



Members absent:   Mrs. Lilly Fong

                  Mr. Chris Karamanos



Others present:   Chancellor Robert Bersi, Reno

                  President William Berg, Elko

                  President Joseph Crowley, Reno

                  President James Eardley, Reno

                  President Leonard Goodall, Las Vegas

                  President Clifford Murino, Reno

                  Vice Chancellor Mark Dawson, Reno

                  Secretary Bonnie Smotony, Reno

                  General Counsel Donald Klasic, Reno



Chairman Cashell called the meeting to order at 9:10 A.M. and

asked Vice Chancellor Mark Dawson to explain the problem that

has arisen concerning the bond issue.



Mr. Dawson reported that at the August 28, 1981 meeting, the

Board approved a bond sale in the amount of $2 million for the

UNLV Hotel and Business Administration building at an interest

rate of 14.8% to the Bank of America.  After analyzing the inter-

est rate and the funds that are available, it was determined that

the University does not meet all of the earnings tests that are

required on this bond issue and therefore cannot satisfy the debt

service in the year 1997 with existing revenues.  Vice Chancel-

lor Dawson further stressed the emergency nature of approving a

$1 per credit increase in the Capital Improvement Fee by stating

the bonds must be delivered to the Bank of America by October 1,

1981, or the buyer will no longer be obligated for this purchase.

He stated that in his opinion there were only two alternatives,

one of which is to increase the Capital Improvement Fee by $1 and

the other to eliminate $2 million from the Hotel and Business

Administration Building Project.  He stated that he did not be-

lieve the second alternative to be a viable one.



All of the Regents, individually, expressed their dislike and

regret in having to impose such an increase.  However, they also

indicated that they believed it to be the only possible solution

to the problem.



Dirk Ravenholt, UNLV Student Body President, stated that it was

his understanding that the funds raised in one year would be ade-

quate to satisfy the bond issue and requested that the $1 in-

crease, if necessary, be implemented for only the 1982-83 school

year.



Mr. Henry Chanin agreed that this was true and that the Board

could reconsider and reduce the CIF after June 30, 1982.



Doc Bodensteiner, ASUN President, stated that the ASUN Senate had

endorsed a recommendation and had directed him to make the fol-

lowing statement to the Board.



           ASUN PRESIDENT ADDRESSES THE BOARD OF REGENTS

                        September 17, 1981



     Once again, those who can least afford to bear a greater

     financial burden are faced with the possibility of having to

     dig deeper to bail out the System to the tune of $200,000

     per year.  The Board will be making an ill-timed and unpre-

     cedented mistake by moving ahead with approval of another

     fee increase without any real opportunity for a well formu-

     lated opposition.  It seems that at any time increased rev-

     enues are required anywhere within the System, it is most

     convenient to slap the burden on the students.  After ab-

     sorbing a 25% increase this year, we are vehemently op-

     posed to any type of increase under any circumstances next

     year.



     We are simply saying, find the money elsewhere.  The stu-

     dents of UNR are responsible and have already done more

     than our share.



     Further increase of student revenue will just give the

     Legislature another reason to cut State funding in 1983.

     If you want to go ahead with construction of the Las Vegas

     building, then find some other source to supplement the

     bonding fund; if the Board doesn't know of any source at

     the present time, then table this matter until an equitable,

     rational, well thought-out decision can be reached.  We are

     aware of the problem that you are facing in regard to high

     interest rates, but your problems are not unique.  When

     students are faced with financial emergencies, they have to

     work out their own budget and survive.  They have no one to

     impose levies or assessments upon.



     At a time when students have already faced increased fees,

     increased tuition, increased housing and food costs, in-

     creased book prices, increased parking costs, and decreased

     financial aid we are being asked for more.  The well is

     drying up.  We believe that it is incumbent upon you to

     provide proper financial planning for us, and my question

     from the students is, why have you not done so, and who is

     at fault?



In response to a statement by Regent Ross that UNR students are

being asked to help finance a building at the UNLV Campus, Mr.

Dawson indicated that no actual UNR funds will be expended, only

used for cross pledging.



Mrs. Gallagher pointed out that it was the University of Nevada

System having the problem and that it was the duty of the Board

to remember that both Campuses are a part of that System.  Mr.

Cashell agreed, stating that this situation could be likened to

UNR co-signing a note for UNLV.



Mr. Ross asked if any thought had been given to the UNR Church

of Fine Arts building and was assured by President Crowley that

this project is under consideration.



Ms. Del Papa moved approval of the recommended $1 per credit in-

crease in the Capital Improvement Fee with the stipulation it be

reviewed after June 30, 1982.  Motion seconded by Mr. Mc Bride.



In response to a question from Mrs. Whitley, Mr. Chanin explained

the reason that this problem has arisen.  Mr. Chanin stated that

a distinction should be made between things that are happening on

paper and things that are really happening.  The problem arises

from the fact that the 1979 bond contract set up three tests on

paper that needed to be met.  These tests were designed as a part

of a series of things included in the contract to enhance the

security of the bonds and make them more attractive to investors.

He added that a combination of factors, including the state of

the bond market and the level of interest rates, have created

this situation on paper.  He further stated that no one could

have anticipated such circumstances and that this was not a case

of mismanagement or neglect on the part of anyone concerned.



Chancellor Bersi further clarified the situation by explaining

that this was a circumstance created by factors in the economy

and by timing factors over which the Board of Regents had abso-

lutely no control.  This was an example of a responsible body

being compelled to act in the face of a problem with a major

building under construction on one of its Campuses.  He further

agreed that there was a possibility that the fee could be return-

ed and guaranteed that his Office and the Board would be watchful

of that.



Motion passed without dissent by roll call vote.



Meeting adjourned at 9:33 A.M.



                         Bonnie M. Smotony

                         Secretary of the Board

                                                       09-17-1981