November 12, 1999 - Faculty Governance

Meeting of the Faculty Council

November 12, 1999, 3:00 p.m.

Carroll Hall Auditorium

Please note the change in meeting place.

Interim Chancellor William O. McCoy and Professor Richard N. Andrews will preside.

Agenda

INFO DISC 3:00 Opening Remarks and Question Time. Interim Chancellor William O. McCoy. Provost Richard J. Richardson will provide an update on the report on faculty compensation recently approved by the Board of Trustees.

INFO 3:30 Chair of the Faculty’s Remarks. Prof. Richard N. Andrews.

INFO DISC 3:40 Annual Report of the Athletics Committee. Prof. Anne Fishel, Chair.

ACT 3:55 Resolution 99-9. On Academic Dress. Prof. Joseph S. Ferrell.

ACT 4:15 Resolution 99-10. Expressing the Sense of the Faculty Council on a Contract with Wachovia Bank. From the Executive Committee of the Faculty Council.

ACT 4:55 First Report of the Committee on Honorary Degrees and Special Awards: Distinguished Alumna/Alumnus Awards for 2000. Prof. Joseph S. Ferrell, Secretary of the Faculty. [Closed Session to all but members of the faculty.]

ACT 5:00 Adjourn.

Joseph S. Ferrell

Secretary of the Faculty

KEY:

ACT = Action

INFO = Information

DISC = Discussion

Minutes

Attendance

Present (54): Adler, Ammerman, Assani, Bender, Black, Blackburn, Boxill, Bromberg, Clegg, Collins, Debreczeny, Drake, Eckel, Elvers, Fink, Graham, Graves, Grossberg, Hooper, Huang, Janda, Kallianpur, Ketch, Kjervik, Kopp, Kupper, Lubker, Ludlow, Margolis, Marshall, Meehan-Black, Melchert, P. Molina, Moreau, Nord, Otey, Panter, Pfaff, Plante, Postema, Raab-Traub, Raasch, Raper, Rosenfeld, Schaller, Slatt, Straughan, Strauss, Taft, Topal, Vevea, Walsh, Weiss, White.

Excused absences (26): Angel, Bluestein, Bolas, Bowen, Bynum, Carl, Cordeiro-Stone, Cravey, De La Cadena, Devellis, Fishman, Gasaway, Kalleberg, Kaufman, LeFebvre, Madison, McCormick, McKeown, A. Molina, Moran, Rao, Savitz, Sekerak, Steponaitis, Vaughn, Williams.

Unexcused absences (4): Covach, Harrison, Johnson, Thorp,

Chancellor’s Remarks

Chancellor McCoy spoke highly of two recent lectures. Dr. Fred Sparling, J. Herbert Bate Professor of Medicine and Microbiology and Immunology delivered the Norma Berryhill Lecture in which he discussed the power of community. Dr. Mario Molina, a recent winner of the Nobel Prize, delivered a public lecture on depletion of the ozone layer. Dr. Molina’s lecture was the second of the recently instituted Chancellor’s Science Seminar Series. This series of lectures brings world-renowned researchers to Chapel Hill to enhance public awareness of scientific challenges and discoveries. The Chancellor thanked Senior Associate Dean Greg Forrest, Dean William Roper, and Prof. William Glaze for their work in putting the series together.

The Chancellor acknowledged with gratitude the hurricane relief work being done by the Center for Public Service and announced that the Center plans to offer small grants to encourage long-term commitments to addressing community problems in the thirteen eastern North Carolina counties hardest hit by the floods.

Chancellor McCoy noted that he has been especially involved in improving the University’s budgeting and planning procedures and in that connection has scheduled a retreat for deans, members of the Chancellor’s Cabinet, and other campus leaders at which the participants will focus on planning for the University at large.

Report of the Committee on Faculty Salaries and Benefits

The Chancellor asked Provost Richardson to comment on the Report of the Committee on Faculty Salaries and Benefits that was approved, as amended, by the Board of Trustees on October 28, 1999.

The Provost said that the Committee had begun its task by unanimously endorsing principles that would guide its work. The report calls on the General Assembly to adopt four principles for funding competitive faculty salaries in the future:

The existing gap between faculty salaries at UNC-CH and our peer institutions must be closed.
The base funding of the institution must be secured.
An appropriate salary increase percentage must be established and maintained over time.
Faculty salaries at UNC-CH should be maintained in the top quartile of our peer institutions.

With respect to tuition and fees, the Report offers the following principles:

In-state tuition and fees should not exceed the bottom quartile of our ten public peer institutions.
Out-of-state tuition and fees should remain at the median of our public peer institutions.
At least 30% of all future increases in tuition and fees should be dedicated to student aid.
The University commits to aggressive measures to educate prospective students and their families about financial aid for needy students.
The University commits to step-up its efforts to raise private funds to augment faculty salaries.

With these principles in mind, the Committee recommended to the Board of Trustees a plan that identifies three sources of funding for faculty salary increases needed to achieve parity with the peer institutions: (1) an increase in funding from the General Assembly, (2) an increase in tuition, and (3) vigorous efforts to raise private funds. The Committee recommended tuition increases of $1,500 for in-state undergraduates phased in over three years and $2,000 for out-of-state undergraduates and all graduate students, phased in over four years. The Board of Trustees modified that recommendation to call for an increase of $1,500 in all categories phased in over five years. The Board also strongly endorsed the principle that all students in financial need be held harmless from the increase.

As modified by the Board of Trustees, the Committee’s report and recommendations will be presented to the Board of Governors in January. Most of the additional funding that will be needed to close the salary gap would come from increased State appropriations (70%). The remainder would come from increased tuition (20%) and private sources (10%).

Prof. Leon Fink (History) asked whether the Committee considered presenting its proposal to the Council for comment before taking it to the Trustees. The Provost replied that he had on two prior occasions given the Council progress reports, but the Committee had to work under strict time constraints. The report had to be ready for presentation to the Board of Trustees at a special meeting called for October 28. He would have preferred a more leisurely schedule.

Prof. Diane Kjervik (Nursing), who served on the Committee, noted that leading members of the General Assembly are saying that there will be little or no money available for expansion budget items in the 2000-01 fiscal year. She asked what the faculty might do to improve prospects that the legislature will commit to its part of the funding plan. The Provost agreed that we could not have been presented with a less opportune time to do this study due to other pressures on the State budget. Nevertheless, we need to state the case as best we can and trust that the Board of Governors and the General Assembly will respond as best they can.

Chair of the Faculty’s Remarks

Prof. Andrews echoed Chancellor McCoy’s comments about the Berryhill Lecture and the Chancellor’s Science Seminar Series. He especially noted that Professor Molina’s lecture had afforded an opportunity for involving high school students.

Several Council members commented on the recent death of Fusayoshi Matsukawa, a post-doctoral student in the Dental School, who was struck and killed by a car while attempting to cross Manning Drive. This incident underscores the need for more attention to pedestrian safety. Prof. Andrews agreed and said that he would ask Chief Derek Poarch to speak to the Council on this topic in December.

Prof. Richard Pfaff (History) returned to the matter of confusion that has resulted from the withdrawal of several companies from the University’s 403B plan. Prof. Andrews invited response from Ms. Nora Robbins of the Benefits Office. Ms. Robbins explained that the University has asked each carrier to accept legal responsibility for compliance with IRS regulations. A number of them declined to do so, with the result that about 400 employees will have to change carriers. The Benefits Office is holding information sessions for those affected. She said that she expects the transition can be completed by January. Arrangements are being made to enable employees who have not completed the necessary paperwork by that time to set aside the same annual amount as usual. For example, employees who do not complete the transition until March will be allowed to achieve their annual goal in nine installments beginning with the April payroll.

Prof. Fink expressed his concern about the functioning of the Council. He said that sometimes he feels “as if I’m on a reviewing stand at the parade ground in which the performers pass by without any connection to our role as legislators on this campus.” He would have preferred more of an opportunity for faculty discussion of such issues as the proposed tuition increase and the contract with Wachovia that will be discussed later in this meeting. The larger question is that decisions have been made that have important implications for a large constituency while the Faculty Council only takes note of them as if the meetings were press conferences. He thought that the Council should have an opportunity to weigh in on issues of this magnitude before they have become fait accompli. Prof. Fink’s remarks were greeted with hearty applause.

Annual Report of the Athletics Committee

Prof. Anne Fishel, Chair of the Athletics Committee, submitted the committee’s annual report. She pointed out that the Athletic Department was recently rated as second in the nation in quality.

Prof. Catherine Marshall (Education) said she would like to see the University achieve more than just minimal compliance with Title IX as concerns women’s sports. Prof. Fishel said she will relay Prof. Marshall’s concerns to the committee’s sub-committee that is charged with tracking Title IX compliance.

Resolution 99-9. On Academic Dress

Prof. Joseph Ferrell, Secretary of the Faculty, presented Resolution 99-9 entitled “On Academic Dress.” The resolution reaffirms the University’s adherence to the standards on academic dress promulgated by the American Council on Education with the exception of a distinctive doctoral gown. The resolution specifies for holders of doctorates from UNC-CH a doctoral gown of Carolina Blue. The facings and cross bands will be of dark blue velvet bordered by white piping. The facings will bear the shield of the University supported by the torches of learning. There is to be no change in the design of the hood and cap, nor in the disciplinary colors specified by the ACE standards for the facings of the hood. The distinctive doctoral gown will be optional; the traditional black gown will remain available to those who prefer it. The resolution also addresses appropriate academic dress for the Chancellor and members of the platform party at commencement and convocations. Prof. Ferrell said that this proposal responds to numerous inquiries from UNC-CH alumni who are on the faculties of other institutions. Resolution 99-9 was adopted.

Resolution 99-10. On the Wachovia Contract

Professor Robert Adler (Kenan-Flagler Business School), on behalf of the Executive Committee of the Faculty Council, presented Resolution 99-10 entitled “Expressing the Sense of the Faculty Council on a Contract with Wachovia Bank.” On July 14, 1999, the University entered into a contract with Wachovia Bank that gives Wachovia specified exclusive rights to engage in certain business activities on campus. Among these are (1) the right to establish a “branch bank” in the Daniels Building (Student Stores); (2) the right to offer an array of banking services in connection with the UNC-One Card; (3) the right of first refusal for any ATM site authorized at any campus site (other than the Ambulatory Care Center and commercial buildings on Franklin Street); (4) right of access to students and their families during orientation and registration, (5) marketing access to students and employees in other venues, and (6) use of the University’s name in marketing the bank’s campus card program. In return for these privileges, the bank agrees to pay to the University specified sums of money. Prof. Adler noted that the contract states that the financial provisions of the agreement are to be kept confidential. This appears to be contrary to the North Carolina Public Records Act (a fact that the University has conceded by making the entire contract available to the public).

Prof. Adler summarized the provisions of Resolution 99-10, which expresses the Faculty Council’s disapproval of the following aspects of the agreement:

Granting exclusive rights to conduct banking services without adequate prior consultation with all affected members of the University community.
Giving Wachovia a favored position that goes well beyond provisions necessary to operate the UNC-One Card System.
Authorizing placement of a “branch bank” near the Pit without stating clear limits on signage.
Attempting to keep confidential the financial terms of the agreement contrary to law.

The resolution concludes by calling on the University to take the following actions:

Limit the use of exclusive marketing contracts to cases in which other alternatives are impractical, and then only after careful and extensive consultation with all affected constituencies.
Seek to re-negotiate the Wachovia contract to (1) remove all exclusive rights not necessary for the technical functioning of the UNC-One Card System, (2) spell out clear privacy protections for students and employees, and (3) bar signage visible outside any branch bank established on University premises
Seek to conduct business on campus with a strong commitment to non-exclusivity.

At the conclusion of Prof. Adler’s presentation, Prof. Andrews invited Acting Vice Chancellor Jack Evans to respond to the resolution.

Background.

Vice Chancellor Evans said that work on the agreement dates back more than two years when the administration began thinking about services that would be desirable additions to the UNC-One Card. A group that included students was convened to explore the matter. A survey indicated that 85% of the students want the ability to transfer funds electronically from their bank accounts to the UNC-One Card and 65% want to be able to use the UNC-One Card as an ATM card. These and other responses to the survey informed the work of the exploratory group.

Out of the group’s discussions there emerged the concept of a primary bank to be associated with the UNC-One Card and one or more secondary banks offering limited services. Consultations were held with Student Government, the Office of Student Affairs, the Chancellor’s Cabinet, and the Chancellor’s Office. He said that his understanding was that there was a general briefing of the Executive Committee of the Faculty Council in March, 1999. Recollections differ about that. On April 23, 1999, a Request for Proposals was distributed to a number of banks. Five banks participated in the pre-proposal conference. Wachovia submitted the only bid in response to the RFP and was awarded the contract, which was made effective July 1, 1999.

Signage.

Those who negotiated the contract feel that it provides ample protection for the University. There will be no exterior signage. There will likely be logo information on the ATM machine located at the site, but this is no different than the existing situation at or near the location in question. The administration expects to take any signage issues to the faculty Committee on Buildings and Grounds and anticipates that Wachovia would abide by the recommendations of that committee.

Branch bank.

Although the contract does use the term “branch bank,” the understanding of the parties is more aptly indicated by the term “service center.” The principal activity to be conducted in the service center is opening accounts and handling account inquiries. The center will not accept deposits, nor will check cashing services be offered. Vice Chancellor Evans thought that it would not be difficult to modify the contract to clarify that the agreement is for a service center and not a “branch bank” as the latter term is defined in law and practice.

Secondary banking relationships.

The contract does give Wachovia the right of first refusal at market rates for location of ATM machines. However, if the University were to authorize a cluster of ATM machines at any given location, Wachovia would have to contract for all available slots in order to exclude other banks.

Privacy.

The administration believes that the agreement contains adequate protection for the privacy of students, faculty, and staff.

Exclusivity.

In order to attract a bank to the kind of relationship that would enable the desired services, it is appropriate and necessary to offer enticements that make this a good deal for all involved.

Prof. Adler thanked Vice Chancellor Evans for his remarks, but pointed to a provision in the agreement known as merger clause. In business law, this means that the written document contains all of the terms of the agreement; extrinsic evidence cannot be adduced to contradict the plain language of the document. This suggests that the clarifications of intent offered by the administration should be incorporated in the contract. Prof. Adler then asked which terms of the agreement are technical requirements needed to achieve the desired interface with the UNC-One Card and which are included essentially for bargaining purposes. For example, is there a technical reason why the UNC-One Card could not become an all-purpose credit card?

Prof. Andrews invited Associate Vice Chancellor Carolyn Elfland to respond to Prof. Adler’s last question and to questions from other members of the Council.

Assoc. Vice Chancellor Elfland said that making University cards useful as general-purpose debit cards for off-campus transactions had been proposed a few years ago at East Carolina University. The North Carolina Attorney General advised that this would violate the Umstead Act, which prohibits State agencies from engaging in business enterprises without specific legislative authority. If the University wants to make its card available for off-campus transactions, we must enter into a partnership arrangement with a bank so that the account actually being accessed is the user’s private bank account, not the user’s University account. It would be technically possible for the University to partner with a processing center, but that is not financially feasible at this time due to the technical expertise that would be needed to maintain the computer software.

Prof. Adler asked why the University could not partner with several banks so that students could associate their UNC-One Cards with the institution of their choice. Ms. Elfland that that is not technically possible. The UNC-One Card software has to interface with the bank’s software. Even if this were technically feasible, it would not be financially feasible.

Prof. Ronald Strauss (Dental School) asked whether the UNC-One Card would bear Wachovia’s logo. Ms. Elfland said there would be three versions of the card. For cards with no associated banking services, there will be no change in design. Cards that also function as a Wachovia ATM card will bear Wachovia’s logo. Cards that can function as VISA debit cards will conform to VISA specifications which will include the VISA imprint and embossed lettering. Prof. Strauss asked about Wachovia presence at orientation and registration activities. Ms. Elfland replied that orientation includes a series of presentations of services available to students. The potential uses of the UNC-One Card in connection with Wachovia banking services will be among those included. In response to a question about Wachovia presence at other venues, Ms. Elfland replied that it will be possible to sign up for Wachovia services at other locations such as the UNC-One Card office.

Prof. Ronald Hyatt (Physical Education) asked whether consideration had been given to making arrangements with the State Employees Credit Union. Ms. Elfland replied that the legal restrictions on who may open Credit Union accounts make most students ineligible, which means that the Credit Union could not offer services to be associated with UNC-One Card. She emphasized that the administration wants the Credit Union to maintain its presence on campus; 44% of our employees bank there.

Prof. Vincent Kopp (Anesthesiology) asked why the Wachovia agreement does not constitute a violation of the Umstead Act. Mr. David Parker, Associate University Counsel, replied that under this arrangement the University is not directly providing banking services in competition with the private sector.

Prof. Richard Pfaff (History) asked whether the agreement limits all banks other than Wachovia to just one ATM on campus. Ms. Elfland said that the contract allows other banks to locate one ATM on campus and gives Wachovia the right of first refusal on additional locations. This would eliminate other banks at cluster locations only if Wachovia were to bid for all available slots at market rates.

In response to a question about whether the University would guarantee the Credit Union a slot at all cluster locations, Ms. Elfland said that the University would not be able to make such a guarantee. The bidding process would be structured, however, so that the dollar amount of the bid is not the sole determining factor. The administration is keenly aware of the fact that the Credit Union is the dominant bank among University faculty and staff. Wachovia, on the other hand, is already the dominant bank among students.

Prof. Timothy Taft (Orthopaedics) asked whether the hospital is considered part of the campus for purposes of this agreement and whether one could continue to use the UNC-One Card as an on-campus debit card if one did not have a Wachovia account. Ms. Elfland answered that the hospital is not part of the campus for purposes of the agreement. The Ambulatory Care Center is something of a gray area in that regard. It was specifically mentioned as not covered by the agreement for that reason. As for Prof. Taft’s second question, there will be no change of any kind in the on-campus features of the UNC-One Card.

Prof. Lawrence Grossberg (Communication Studies) said that to his mind the important issue is not whether minor adjustment can be made in the Wachovia agreement. The larger question is the extent to which the University should become entangled with private business entities. He mentioned recent agreements with Nike, Coca-Cola, and IBM in addition to the Wachovia agreement now under discussion. “Some of us are fundamentally opposed to this,” he said.

Prof. Craig Melchert asked for comment on the contract’s provisions concerning confidentiality of its financial terms. Mr. Parker said that Wachovia had asked for those provisions to be included and that the University had agreed to do so “to the extent permitted by law.” After consultation with the Attorney General, the University has disregarded the confidentiality provisions.

The discussion having concluded, Prof. Andrews put Resolution 99-10 to a vote. The resolution was adopted by voice vote.

Distinguished Almuna/Alumnus Awards for 2000

The Council went into closed session to consider Distinguished Alumna/Alumnus Awards to be presented at University Day 2000. Prof. Ferrell reported the recommendations of the Committee on Honorary Degrees and Special Awards. Five nominees recommended by the Committee were approved.

Adjournment.

The business of the day having concluded, the Council adjourned at 5:05 p.m.

Joseph S. Ferrell

Secretary of the Faculty