MERC

MERC Board of Director’s Meeting

May 10, 2006, 9:30 a.m - Noon

Attendees

Don Doucette, Rita Gulstad, Russell Helm, Bob McGlasson, George Rickerson (MOBIUS), Jon Rickman, Chad Shepherd, Robert Stein, Tim Warren, Greg Wirth

MOREnet Staff: David Byland, Jennifer Doll, Bill Mitchell, Nancy Piringer

NGN Update – Bill Mitchell, Executive Director – MOREnet

Mitchell reminded the Board that an NGN update had been sent out the previous week, he stated he would like to answer any questions regarding the update. Stein asked what Mitchell’s best guess was regarding the future of NGN. Mitchell responded that future NGN action would be completed in two phases. The existing backbone would be upgraded, whether to 1Gig or 2.5, 5, 10 or OC48. The bid for the upgrade should go out the week of May 15th or the week of May 22nd. Once bids are received there will be an idea of costs, if it is close to the current cost then MOREnet would like to go ahead with an upgrade by January of 2007.

Concurrently, MOREnet will continue to look at the dark fiber option, but instead limiting it to along the I-70 corridor and the Kansas City and St. Louis metro areas. An engineering consultant will be hired to help with this phase of the plan. The cost would be shared between the University of Missouri and MOREnet due to dramatically growing capacity demands of the University. The goal is to try to find a consultant by late summer of this year.

Tim Warren asked if the dark fiber along I-70 would be leased or purchased. Mitchell responded that the idea right now would be lease, called an IRU (Irrefutable Right to Use), the typical length of that lease is twenty years. You pay up front for the use of the asset, then pay for maintenance and operation. MOREnet would not be committed for twenty years, you can walk away at any time. MOREnet would probably base a business model on recouping the initial up front costs within five years, and after that would be paying only maintenance and operation costs.

Stein asked Mitchell where the majority of network traffic is carried. Mitchell responded that currently and in future predictions the I-70 corridor carries the majority of traffic. There are significant up front costs associated with dark fiber, at a future point in time it may make sense to upgrade to dark fiber along the I-55 corridor, but that probably would not occur until 2009 or 2010.

Rickman asked Mitchell about the timeline of reaching the capacity limit of the backbone at its current 622mb circuits. Mitchell responded that currently, especially along the I-70 corridor that it is running at about 60-70% sustained traffic. There are also higher peaks; it will have to be upgraded sometime during 2007. Much of the consumption is internet traffic destined for Kansas City and St. Louis.

Tim Warren commented that it looked like upgrading to 1Gig would knock down sustained traffic to about 30% or 40%. He asked how that compared to past upgrades?
Mitchell responded that in the past it has been lowered more. For example the last time there was an upgrade the network gained four times the capacity. He also added that for the past several years annual growth flattened out at about 10-12%, this year growth has increased to 24%.

Legislative Update – Bill Mitchell, Executive Director – MOREnet

Mitchell began the update by reminding the Council that the governor’s recommendation is a 1% increase to the MOREnet budget, an increase of about $101,000. Mitchell thanked the Board for their support, and the collective efforts of the higher education community as well as K-12 community efforts. Stein commented that a lesson to take away from the past year is that a maintained effort year round is needed.

Gulstad brought up the topic of other impacts to higher education and mentioned the future of virtual schools in Missouri. This is something that may impact higher education down the road as people receive degrees from virtual schools. Mitchell mentioned that MSU is currently running a virtual high school, and trends like these are going to begin to catch up to bandwidth availability.

Gulstad added that HB12, which provides funding for online resources and EBSCO, passed through without any changes. Stein mentioned the P20 bill, which was built into two pieces of legislation. The stand alone piece passed through and everyone expects the governor to sign it. It requires the head of the coordinating board, the head of state board of education, commissioner of education , commissioner of higher education, and the director of economic development to meet minimally twice per year to set priorities in tracking for the P20 system and set indicators of success and report publicly to the governor and the legislature.

MOREnet Council Update – Rita Gulstad

Gulstad stated that during the previous Council meeting the plant fund was discussed along with MERC reserve funds, which does need some review. Stein stated that the plant fund has been set up and there has been a correction regarding the University’s regulations and the use of the plant fund. The plant fund is not for exigency, and MOREnet staff has been charged with working on developing formulas that would help to determine what might be needed for both the exigency and the plant fund. Stein added that another question is how does the money get into those funds and where does that money come from? MERC has the smallest amount of reserves of the programs.

Stein moved on to report that the MOREnet Council did some preliminary looking at goal setting. Among those ideas discussed was the possibility of the MOREnet Council doing less micro-managing, focusing more on the future, and looking at a national perspective and best practices in other states. Another idea was trying to promote more collaboration between member sectors, and that will have a direct impact on MERC.

In addition, Stein stated that one of the agenda items at the MOREnet Council meeting was MOREnet Good News. The Riverbluff Cave story was presented and Stein stated that the Council is interested in having more good news items like this presented, it provides information that they can use when they are promoting MOREnet publicly to the legislature. Gulstad commented that she felt it was a great example of collaboration between K-12, higher education, and the libraries.

Stein also reported that the MOREnet Council initially approved the FY08 budget request to the University. The Council received assurances from Nikki Krawitz that the University understands that the MOREnet Council has to make decisions that could change over time. The MOREnet Council was told that the University was very interested in hearing the Councils voice throughout the budget process. The initial budget went forward to the Board of Curators; they will not take final action until their July meeting.

MERC Financial Update – Jennifer Doll

Doll stated that everything is tracking appropriately for the period of ten months into the fiscal year. Salaries and benefits are still in line, they are at about 80% of the projected budget Total operating expenses are also in line with expectations. It is expected that MERC will end the fiscal year with a little revenue less than expense. That is primarily the result of the use of reserves to help fund the shared network. That is what is seen as the funding shortfall assessment in the revenue category, it is a negative and it is being taken out to help fund the shared network.

Doucette asked Doll if it is correct that the MERC reserves are considerably less than other reserves? Doll responded that was correct. Doucette reminded the Board that there was an intentional strategy behind that move. At one time MERC had about $800,000 in reserves and has been systematically reducing those reserves under the leadership of the council. Doucette asked if that was a mistake? Stein responded that it is his initial reaction that no, it was not mistake but based on the dynamics that MERC is up against now with the talk of plant funds and coordinating contributions into exigency funds it is hard to predict what will happen and how other programs will respond.

Doucette asked if it might be time to adopt a more balanced budget rather than depending upon reserves. Gulstad responded that she believes MERC can no longer continue to depend on reserves, the reserve should probably be held and the budget balanced. If reserves are dipped into then it’s a smaller amount. Doucette stated that it’s his opinion that MERC has reached the point where reserves should probably not be reached into anymore. Gulstad stated that if she is recalling correctly that with the income that was collected this year, MERC was actually $8,000 short of being able to pay their portion and the reserves were dipped into. Gulstad asked Doll to confirm. Doll responded that was correct for FY07, it was projected that for FY07 about $10,000 would be needed from reserves.

Doucette asked if it is time to revisit the funding formula discussed at the last meeting. He stated that he saw the note on the agenda stating the FY08 MERC Participation Fee Schedule had been delayed and wondered how it was coming? Doll responded that there were some initial discussions after the February MERC Board meeting. Discussions and planning regarding the MERC reserves and the establishment of a plant fund has taken time away from the FY08 Fee Schedule discussions. Doll indicated that she and Nancy Piringer had some initial discussions regarding possible scenarios for the FY08 Fee Schedule. They have also spent some time with George Rickerson (MOBIUS) discussing some Excel tools that might help to mitigate the concerns raised in the February meeting regarding large increases for some members and large decreases for other members. Helm stated that planning needs to move forward, and hopes that recommendations will be on the table by the end of the summer.

Doucette asked what the guiding principals were in trying to avoid a radical redistribution of costs and creating big winners and big losers? Doucette stated that was his major concern during the February Board meeting, and expressed concern that the February MERC minutes do not reflect his level of concern. He stated that he wants to either confirm that one of the guiding principals behind the fee structure is equitable distribution and that whatever model is adopted that it is not a radical redistribution of costs, or if it is not that he has made it clear it is of concern to him. Gulstad responded that she believes the end goal should be a fair and equitable approach for all sizes and types of institutions. Helm added that he believes it is very important to reach an equitable philosophy, if changes are made it will also be important to have a model for the transition into a new fee structure because clearly abrupt changes don’t work for anybody.

Mitchell added that a fee structure does not have be implemented  in one year, changes can be phased in over two years in order to smooth out the process. Doucette responded that his concerns over the model presented in February stemmed from the idea that fourteen institutions were helping to reduce the burden of fifty-two institutions. Doucette stated that he wanted to voice his concerns over the future of that model and make sure the Board was in agreement that a fee structure with a less dramatic redistribution should be worked out.

A decision was reached that MOREnet staff will prepare draft models and will have them ready for presentation  at the August 9th Board meeting. This will allow time for revision and a presentation of the finished fee structure at the November MERC IR meeting.

Gulstad asked Helm to go ahead and identify some other principals that might be helpful to Piringer and Doll, such as a two-year tiered approach and trying to find an equitable process. Gulstad recalled the Board talked about multiple tiers based upon a possible variable of enrollment and if so it would need to a much more gradual approach. Gulstad asked Helm to work with Piringer and Doll to get that started. Helm responded that he would and that they would start to get a few working meetings to discuss concepts and ideas.

Doucette asked if he understood correctly that institutions made the commitment to their bandwidth in December and then would be billed on that amount? Doll responded that yes, for FY07 MOREnet completed an assessment based on bandwidth that was in production or on order as of December 31st. That assessment is what will be used to determine invoices for the late summer/early fall timeline. Doucette asked if when the new fee schedule is determined, will institutions have several months to determine changes to bandwidth based on new costs? Gulstad responded that was correct and that would allow for at least five or six weeks to make decisions.

Doll moved onto the HELIX financials. All members who attended the conference have been billed. Doll pointed out the revenue transfer from MERC over to the HELIX Conference for the free seats that were approved, a total of $8,580. Salaries and conference expenses incurred so far have also been listed on the report. Doll added that cheaper rates were negotiated with Tan-Tar-A for snacks and food items, and provided some savings. Doll stated that she would like to know any opinions on the quality or quantity of available food, since the changes saved about $20,000 to $25,000. At this point the expenses are less than the revenues and there are still a few costs coming in. At this point there is no need for an additional transfer from MERC to HELIX, but there will be some additional costs coming through as the last conference bills come through. At most it will probably only be around four to five thousand dollars that would be transferred. Doucette added that he thought that the conference staff should be commended for the cost containment. He added that there shouldn’t be any reason why a conference shouldn’t be able to break even, and the idea that it’s coming close as a high quality conference is an accomplishment.

Doll moved on to the last worksheet, the budget sheet for MERC. It is the same information presented in February and at the HELIX Conference, and has not been updated. The budget was approved last fall, the mid-year reprojection was completed in January. Doll asked for any thoughts or comments on the budget sheet. No questions were raised.

MERC Goals – Rita Gulstad

Gulstad reminded the Board that at the February meeting there was discussion of forming a task force to work on the MERC Goals and Activities document. That group has been working on refining the document that was first drafted by the Board four or five years ago. Gulstad noted that the document is still in draft form, and the objective for the meeting was to share it with the Board and ask for comments or questions..

Gulstad stated that there were not major changes to the four main areas, Collaboration. Policy/Leadership, Higher Education Best Practices, and Services. Gulstad pointed out that the first MERC goal of Collaboration ties into the MOREnet Councils goal of collaboration amongst Higher Education, K-12, and libraries. Doucette stated he felt okay with the entire document.

Gulstad stated the biggest changes that were made were on sections III (Higher Education Best Practices)and IV (Services). Within section III there was a discussion on how MERC is gathering information from its constituents and several things were rephrased. Within section IV there was a focus on things that MOREnet did, but what really the group really wanted to say was what MERC was promoting some things. From these discussions the group developed two possible action items for the next year, the first goal being to do things on a national effort. It was discussed this might be moved forward by creating a workshop or webinar on the use pod-casting in education. The second action item that discussed was that a cohesive series of workshops or webinars might be developed to address legal issues related to technology and higher education.

Doucette asked if the MERC Board identifies and includes what topics to discuss in the goals or do you let the goals reflect that MERC will maintain an opportunity to inform and provide for discussions about best practices regarding technologies. Gulstad responded that the idea of the group was to identify action items that will help MERC achieve some of these goals. Gulstad asked if anyone has any objections to the four goals outlined in the document. Wirth commented that the opening paragraph does not seem to address the idea that he views MERC as a watchdog. Gulstad commented that she thinks the original concept of watchdog has migrated somewhat over to the MOREnet council as the oversight body that has higher education representatives on it. Gulstad said she thinks the document might more strongly indicate how MERC represents higher education views to the MOREnet Council. Stein added that by tradition the chair of the MERC Board is appointed as an alternate for one of the representatives for higher education on the MOREnet Council, there is a direct liaison and relationship between MERC and the MOREnet Council.

Stein asked if there is a way to build into the goals something that addresses the idea that MERC should have input on the MOREnet Council. Gulstad asked if a fifth goal such as “Governance” might be appropriate, to address communications of the MERC body with the MOREnet Council. Gulstad stated she will take that idea back to the goal task force, she also asked that if anyone has suggestions for wording to please share them with the task force.

HELIX 2006 Update – Nancy Piringer

Piringer reported that for 2006 there was a total of 166 people who attended HELIX, that is down 41 from last year and up six from 2004. Piringer said she is not sure what to attribute that to, it could be budget related. Piringer has heard that conference attendance statewide and perhaps nationally has been down. Piringer stated that it is interesting to note that the institution with the most people attending was St. Louis Community College, they had 16 people attend. They were followed by 14 from Missouri State, then 11 from Central Missouri State. There was a good distribution between two year public, four year public, and independent institutions. Piringer shared that planning for next year included moving the timeline up. Piringer stated that she has already been in contact with Joel LaRue, who as chair elect will work on the conference planning board for next year. Piringer stated that some of the comments will guide decisions for the 2007 conference in terms of themes and content focus. Overall conference evaluation comments included ideas like more sessions on topics like pedagogy, net generation learners and integrating technology into the curriculum. Other suggestions included more information on I-Pods and distance education, and strategic planning for online programs.

Gulstad asked about the time of the conference, like March versus February. The group agrees that February is a concern because of weather, but the challenge March presents is spring break. Piringer responds is that an additional challenge is working with Tan-Tar-A and the space they have available. Piringer added that the possibility exists of changing the date for the 2008 conference, and maybe moving it to fall would be appropriate. Warren commented that funding late in the school year also presents problems, moving the timeframe to fall would help to alleviate that.
           
Piringer asked the Board about last years MERC CIO forums, she stated some of them were fairly well attended but most of them had little to moderate attendance. Piringer asked if the Board would be open to changing the name of the session, but instead group them with the broader set of web seminars that MOREnet does. Piringer would like to do this in order to get the point across regarding collaboration and cross-program communication. In particular she is developing a series regarding teaching and reaching the net generation learner, and those might include a few sessions on pod casting, pedagogy, social networking, blogging, and gaming.  The Board had no objections.

Piringer reported that Bob Paulson has volunteered to get started on a project that would allow MOREnet to host a password protected space where MERC members could voluntarily share information regarding their campuses. The idea behind the application would be to foster communication and collaboration. Paulson has volunteered to create a survey to be sent to the Institutional Representatives inquiring as to what information should be contained within the application. Piringer added that she has an upcoming meeting with MOREnet technical support staff to discuss the type of support needed for such an application. Doucette asked Piringer if the forum would be limited to Institutional Representatives or would additional organization members be able to access the forum. Piringer responded that the forum would not be limited to IR’s and that additional staff would be encouraged to participate.

Stein asked Gulstad if this was her last meeting as the MERC Board Chair, Gulstad confirmed that it was. Stein took a moment to express his gratitude for her leadership and commitment. The Board agreed and thanked Gulstad.

Doucette motioned to adjourn the meeting, Wirth seconded.