10/03/1991

UCCSN Board of Regents' Meeting Minutes
October 3-4, 1991








10-03-1991

Pages 1-6



                         BOARD OF REGENTS

                    UNIVERSITY OF NEVADA SYSTEM

                          October 3, 1991



The Board of Regents met on the above date in the System

Administration building, Conference Room, Las Vegas and the

System Administration building, Conference Room, Reno, in a

special teleconference.



Members present:  Mrs. Carolyn Sparks, Chairman, Las Vegas

                  Mrs. Shelley Berkley, Las Vegas

                  Mr. Joseph Foley, Las Vegas

                  Mrs. June F. Whitley, Las Vegas

                  Dr. Jill Derby, Reno

                  Dr. James Eardley, Reno

                  Mr. Daniel J. Klaich, Reno

                  Mrs. Dorothy S. Gallagher, Elko



Members absent:   Dr. Lonnie Hammargren



Others present:   Chancellor Mark H Dawson

                  President Anthony Calabro, WNCC

                  President Joseph Crowley, UNR

                  President Robert Maxson, UNLV

                  President Paul Meacham, CCSN

                  President Ronald Remington, NNCC

                  President James Taranik, DRI

                  Mrs. Rita Gubanich for President Gwaltney,

                      TMCC

                  Mr. Ronald Sparks, Vice Chancellor

                  Mr. Donald Klasic, General Counsel

                  Mrs. Karen Steinberg, UNS

                  Ms. Mary Lou Moser, Secretary



Chairman Carolyn Sparks, presiding in Las Vegas, called the meet-

ing to order at 8:50 A.M., stating the purpose of the meeting

was to review the Governor's salary recommendation that salary

increases for all State employees be deferred until January 1,

1992, with the possibility that such raises might be made

retroactively.



 1.  Approved That the Board of Regents Reduce the Institution

     Budgets by $1,225,429 as Identified as Necessary for Sal-

     aries for UNS Professional Employees and That Those Funds

     Be Used to Honor Contractual Agreements Currently in Ef-

     fect.



     General Counsel Klasic stated that the Governor and the

     Board of Examiners have requested that pay increases for

     all State employees be deferred until January 1, 1992, at

     which time a determination will be made whether to extend

     the deferment or to grant pay raises, possibly retroactive-

     ly.  He informed the Board it could either concur with

     across-the-board deferments applicable to all employees,

     whether on "soft" money or "hard" money, with the excep-

     tion of DRI, or determine some other action.



     Mrs. Gallagher moved that the Board accept the Governor's

     decision on deferral of the cost-of-living increase and

     that it be applied to UNS employees.  Dr. Eardley seconded.



     Mr. Klaich related that he had read the Attorney General's

     opinion issued in her letter dated September 26, 1991, which

     stated that the Governor, and specifically the Board of

     Examiners, had the ability and were authorized by the Leg-

     islature to withhold salary increases.  He added that the

     opinion is based on statutory language found in the appro-

     priation bill, which does not apply to nor appear in the

     separate section of the appropriation bill for salaries of

     professional employees of the University of Nevada System.



     Further, Mr. Klaich stated that he had spent better than

     8 years on the Board trying to convince people of the unique

     status of UNS, and particularly of the unique status of UNS

     employees.  Continuing, he added it has always been the UNS

     position that the comparison group for UNS employees is not

     other State workers, but other similar institutions with

     whom UNS competes.  He related that by and large this is an

     appropriate distinction.  However, in this particular in-

     stance, he did not think it appropriate because as citizens

     of the State of Nevada, with the State in financial prob-

     lems, it is the obligation of the Board to share equally

     with other agencies.  He stated that he felt it the morally

     correct action to withhold pay raises within UNS if other

     State employees were similarly treated.



     However, Mr. Klaich stated that in his opinion, there is a

     fundamental difference between the salary relationship of

     UNS to its professional employees and virtually all other

     State employees, primarily classified, and that is that

     UNS professional employees work pursuant to written con-

     tracts which are protected from retroactive adjustments

     by the United States Constitution.  He related that if

     there was a State financil crisis or exigency, then that

     would be a reason to not honor the contracts.  Mr. Klaich

     stated that the Board of Examiners and the Governor have

     stated pay raises must be withheld, and in the media re-

     ports on this date, the State Treasurer and Controller

     feel the State finances will be available for those raises,

     and the Secretary of State has asked that the Board of

     Examiners reconsider their action later in the month when

     new monthly tax revenue statements are due.



     Mr. Klaich added that he would vote against the motion,

     and felt the UNS share of pay raises should come from

     other sources, primarily from the contingency plans the

     Presidents have presented and which the Board adopted.

     Further, he felt General Counsel should be directed to add

     a clause to the professional employees contracts which

     would give flexibility for the Board to respond should a

     like situation occur.



     Answering Dr. Eardley's question, Chancellor Dawson stated

     Presidents were instructed that contracts be written such

     that the salary for the period July 1 to October 1 would

     be the same as last fiscal year, and then on October 1 the

     cost-of-living increase would take effect.



     Responding to Dr. Derby's request for clarification of Mr.

     Klaich's remarks that the Board does not have the power

     to change the contracts, General Counsel Klasic stated

     that NRS 353.255 does give the Governor authority to re-

     quire a reserve of funds if there is a financial emergency

     and this would presumably include the UNS.  Also, he stated

     that he has always taken the position that under the con-

     stitutional autonomy of the Board, the Governor may ask

     for a reduction of funding for UNS, but cannot tell UNS

     how to make the reduction.  In addition, the term "financial

     emergency" must be defined and if a conclusion cannot be

     reached, then the matter would be clarified in the courts.



     President Crowley asked whether a State "financial emer-

     gency" would be the same as the UNS term "financial exi-

     gency", and reminded the group that if it is, the Board

     has policies and procedures to deal with that.  He asked

     whether the State had such procedures or policy, with

     General Counsel Klasic stating the only statute of which

     he is aware is the aforementioned one which requires a

     reserve to be established.  Mr. Ron Sparks added that

     during the last session the Legislature defined the mini-

     mum general fund balances at 10% of the annual appropria-

     tions, which at this time is approximately $50 million.

     Mrs. Gallagher related that she did not feel anyone in

     the State could determine at this time whether there was

     a financial emergency.  She added that in her opinion it

     would not be a prudent move to give pay raises at this

     time and questioned why this matter could not be postponed

     until January, 1992.



     Chairman Sparks stated she had discussed this matter with

     Vice President Harry Neel, UNLV, who stated using the

     current 4% contingency plan approved by the Board, would

     be a hardship in that those funds would be from a different

     appropriation area and might not be replaced.  President

     Maxson stated he did not feel withholding salaries would

     be a hardship, in that the pay raise would be considerably

     less than the total 4% originally called for.



     Dr. Derby asked that someone comment on the political cost

     that might be involved.  Chancellor Dawson stated that he

     felt if the Board demonstrates it can find the funding for

     the pay raises from other budget areas, the Legislature may

     feel UNS is over-funded in those areas.  He also cautioned

     about granting raises in this manner and then later find-

     ing out there isn't a State financial emergency.



     Ms. Diane Dietrich, Unit Senate Chairman, stated that the

     faculty members with whom she has spoken, feel that the

     Governor is making them pay an extra tax that none of the

     other people of the State are being asked to do, and they

     are very unhappy about that.



     Professor Jim Richardson, UNR, stated there is an amazing

     amount of budgetary sophistication around the System among

     faculty who realize the Board of Examiners' decision is to

     withhold $1,700,000 from UNS, and that it was not a deci-

     sion to defer UNS pay increases.  This has raised some

     questions as to why UNS has prepared 4% contingency plans.

     Dr. Richardson stated he attended the Board of Examiners

     meeting in which the Governor did state he was not speak-

     ing for the Board of Regents or for specific school boards

     that have independent authority.  He produced a letter he

     received from UNR stating that on October 1, 1991 his rate

     of pay would change, and implied that this, or a similar

     letter was sent to other faculty as well.



     Chairman Sparks asked someone who had attended the Board of

     Examiners meeting to explain why they did not consider the

     contingency plans of the State agencies.  Dr. Richardson

     stated that in a private meeting with the Governor and a

     number of faculty from around the System, they were told

     that while UNS contingency plans for a 4% budget cut did

     not require layoffs, a number of other State agency plans

     did, and he was trying to avoid layoffs.



     President Remington, NNCC, stated that if Campuses could

     be assured that the reduction for pay raises, which amounts

     to 1 or 1 1/2% could be taken from the contingency plan in

     place, they would be able to accomplish that; however, he

     questioned whether Campuses would be asked to take an

     additional 4% budget cut.



     President Crowley reminded the Board that at the time of

     approving the contingency plans, and when those were for-

     warded to the Governor, it was the Board's intent to re-

     view the situation prior to any actual reductions being

     made.  He asked whether a decision could be delayed until

     it is determined whether the Board of Examiners will re-

     visit the issue later in the month.  Chairman Sparks re-

     lated she had received a number of phone calls from people

     who have small businesses who have urged that the Board

     not give pay raises.  General Counsel Klasic reminded the

     Board that October 10 is the deadline for informing the

     Payroll Departments about any decision concerning the next

     checks to be distributed to employees.



     Dr. Richardson stated he felt that the faculty would under-

     stand postponing a decision by the Board if they were noti-

     fied that information is still being gathered.  General

     Counsel Klasic reminded the Board that there are over 2000

     employees and there would be no guarantee that someone would

     not sue for breach of contract.



     Mr. Klaich reiterated that the Board finds itself in a very

     difficult position, but stressed the difference between

     UNS professional employees and all other State employees.

     Dr. Derby expressed her strong concern about the "political

     fallout" of the situation and reminded the Board that UNS

     is dependent on the goodwill of the Legislature.  Mrs.

     Whitley stated she felt UNS should not ignore the request,

     but that the percentage be paid to the State in funds other

     than from employee salaries.



     Mr. Klaich asked whether the motion could include the

     Board's intention to revisit the issue in January, or

     sooner if circumstances warrant, with Mrs. Gallagher and

     Mrs. Berkley agreeing.



     Motion failed on roll call vote:



         Aye:  Regents Derby, Eardley, Gallagher, Sparks

         Nay:  Regents Berkley, Foley, Klaich, Whitley

         Absent:  Dr. Hammargren



     Mr. Klaich moved that the Board reserve or reduce their

     budgets in an amount equal to $1,225,429 as identified by

     the Board of Examiners and that the Presidents of each

     System Institution be directed to identify their respec-

     tive share of those funds within the parameters of the

     Board's previously adopted contingency plan.  Mrs. Berkley

     seconded.



     In response to General Counsel Klasic's inquiry, Mr. Klaich

     clarified that 1) the motion refers only to professional

     employee salaries; 2) that the Board has no jurisdiction

     over the classified employees; 3) that the reserve be in

     the amount of $1,225,429 as identified by the Board of

     Examiners; and 4) that the amount from each Campus be on

     a pro rata basis.



     President Calabro expressed concern for WNCC professional

     employees receiving a pay increase when there are so many

     State classified employees living in Carson City.  Presi-

     dent Meacham stated his concern for the classified em-

     ployees but agreed that the Board could only make decisions

     concerning professional employees.  Vice President Rita

     Gubanich stated TMCC's concern was that each Campus be

     given the same directive, stating there are a number of

     full-time employees who work for both TMCC and UNR.



     Mrs. Berkley questioned that perhaps each Campus be allow-

     ed to address the problem in its own way, with Dr. Eardley

     replying that would only cause chaos among the Campuses.

     President Remington reminded the Board that UNS has been

     addressing for a number of years the question of equity

     among faculty members, and urged that a System approach be

     used.  President Maxson stated he would prefer including

     all employees on his Campus, but understood the contractual

     obligations.



     Motion carried on roll call vote:



         Aye:  Regents Berkley, Eardley, Foley, Klaich, Whitley,

               Sparks

         Nay:  Regents Derby, Gallagher



     Chancellor Dawson requested the Presidents to prepare their

     contingency plans for review by the Presidents' Council.

     The Board asked that those contingency plans be calendared

     for the October 24-25, 1991 meeting, and agreed that should

     the matter be revisited by the Board of Examiners, or if

     there is some change in the financial fortunes of the State,

     a special meeting would be called.  It was also agreed that

     the Chairman and Vice Chairman will contact the Governor

     and the members of the Board of Examiners with the UNS

     decision, explaining the difficulty and the unhappiness of

     the Board with the choices with which it was faced.  Mr.

     Foley suggested a verbatim copy of the meeting might be

     distributed to the Board of Examiners.



     President Crowley asked whether there should be a change

     in State finances and the cost-of-living is granted by the

     State, would the funds be returned to UNS.  It was agreed

     that UNS could ask that they be returned, but that there

     was no guarantee they would be.



The meeting adjourned at 10:10 A.M.



                             Mary Lou Moser

                             Secretary of the Board

                                                       10-03-1991