October 3-4, 1991
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
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,
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
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-
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
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
Motion carried on roll call vote:
Aye: Regents Berkley, Eardley, Foley, Klaich, Whitley,
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