May 6, 2013 Dear President Espegard and Board Members: In September 2012, at the Boards request, I identified for

your consideration and approval four goals which I set forth as my objectives for the academic year. Permit me now to provide you with my accomplishments to date in each of these areas. 1. Design, develop, and obtain approval by the SBHE of the Pathways to Student Success Plan for the University System. As you know, I consider Pathways to be my signature statement of educational reform for public higher education in North Dakota. Drawn from best practices around the country, it represents an effort to raise standards across P-16. Built around five foundation blocks which I designated as access, quality, affordability, learning, and accountability, the concept includes a North Dakota High School to College Success Report that provides meaningful dialog across secondary and post-secondary education to ensure the vertical alignment of curriculum, standards, and outcomes; expanded aid for adult learners and low- and middleincome students; substantive improvements in the preparation, delivery, and pricing of dualcredit courses; system-wide consistency in the ratios used for in-state and out-of-state tuition; the mission-driven transfer of all remedial/developmental coursework to the two-year colleges; combining, where appropriate, tuition and non-mandatory fees for greater transparency in determining educational costs; greater regulatory control over the use of undergraduate tuition-waivers; the establishment of a high school core capped at fifteen courses; a criteria-based admission standards for each of the Carnegie-classified universities; and the introduction of an Internet-based index score (180, 190, 210), known as the Calculator, for high school students to monitor their progress toward admission. Following your approval of the Pathways concept, I and members of my staff proceeded to communicate with constituencies within and outside the university, sharing the concept, seeking and listening to comments, negotiating where needed, and revising policies and procedures as elements of Pathways moved into implementation. Numerous meetings occurred at the vice chancellor level as well as at the cabinet level to work out differences, make accommodations and exceptions where necessary, and arrive at a consensus on a proper timetable for implementation. Included for your review is the Pathways concept (Appendix A) and Pathways Decision Points and Timeline (Appendix B). 2. Prepare and justify the staffing needs required by the University System Office to perform its required functions. As all members of the Board can appreciate, this goal has been a challenge from the very start. Despite very clear evidence of the lack of a unified system, and reinforced most recently by the State Auditors February 4, 2013 Performance Audit Report, the simple magnitude of what has been shown to be needed has caused considerable backlash from the media as well as from campus leadership and individual legislators. As a Monday-morning quarterback, I can now question the tactic we used to convey the magnitude of our personnel needs. Although our request was justifiable in terms of workforce needs and most assuredly

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considered conservative when compared to similar university systems, it probably came off as too much, too soon. Nevertheless, with your support, we moved forward with a robust plan that garnered initial recognition in the Governors proposed budget, which supported seven of the thirty requested positions. Since then, the number has devolved into a political football. If we succeed in obtaining even half of the request, I will consider this a successful effort and one which will set us on a path to demonstrate the systems capability and justify a request for the balance of the positions during the next legislative session. Included for your review is the position request that was shared with the legislature (Appendix C). 3. Prepare for discussion and approval by the SBHE a set of policies and procedures that better reflect the intent of the Board with respect to the role and responsibilities of the chancellor. Example policies and procedures will include: a. b. c. d. e. Evaluation of presidents Searches for presidents Procedures for the selection of a president Committees of the SBHE Chancellors and presidents authorities and responsibilities

Following your guidance and encouragement, I proceeded early in my tenure to introduce several new and revised policies using best practices as our preferred approach. As you can judge from the following list of policies, the policies were broad-based and extensive, dealing with personnel, committee structure, presidential searches, performance evaluations, authority and responsibilities, compensation, audit functions, posthumous degrees, and program articulation. September 5, 2012 302.10 Executive Committee (new) 302.11 Academic Affairs Committee (new) 302.12 Audit Committee (new) 330 Policy Introduction, Amendment, Passage (revised) 601.1 Presidential Search and Screening Committee (revised) 604.1 Performance Evaluations: Presidents (revised) 604.2 Performance Evaluations: Chancellor (revised) September 26, 2012 100.6 Authority and Responsibility of the SBHE (revised) 304.1 Chancellor/Commissioner of Higher Education Authority and Responsibilities (revised) 305.1 College and University Presidents' Authority and Responsibilities (revised) 403.5 Secondary-Postsecondary Articulation Agreements; Dual Credit Postsecondary Enrollment Options (revised) 404.1 Delivery Formal Approval for Credit Activities (revised) 430.3 Posthumous Degrees (new) 608.2 NDUS Employees - Non-renewal and Dismissals (revised)

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705.1 802.8

Executive Compensation (revised) Internal Audit Functions (revised)

None of these changes was achieved without considerable discussion. Nevertheless, we were able to reach consensus on all matters with the exception of the two which dealt with the roles and responsibilities of the presidents (604.1 and 305.1). There I met with considerable opposition from the presidents even though the changes were based on best practices. Subsequent to hearing their complaints the General Counsel and I met with them at three cabinet meetings and worked through their issues. The final copy, which is based on consensus, is enclosed and will be presented at the May 9 SBHE meeting for approval. (Attached are the two revised policies (Appendix D and E) 4. Build a positive relationship with the North Dakota Legislature. Building positive and lasting relationshipswhether with individuals, private/public entities, or governmentsrequire a broad-based approach that includes trust, respect, straight-talk, and patience. I have devoted myself to advocating tirelessly for transformation of higher education in our state, for improved graduation and retention rates and for better accountability while communicating the vision of how we can lift the quality of our institutions for the benefit of our students and North Dakota. In doing so, I believe I raised awareness throughout the state and influenced some key stakeholders during the process, which I believe was instrumental in securing the unprecedented higher education budget that was passed last week. Achieving this has involved all of the following: a. b. c. d. e. Opinion pieces in newspapers across the state (Appendix F) Interviews with newspaper editors (Appendix G) Radio interviews (Appendix H) Presentations to students and faculty (Appendix I) Presentations to K-12 superintendents, principals, counselors, and teachers (Appendix J) f. Presentations to outside clubs and organizations (Appendix K) g. Social interactions and meetings with legislators (Appendix L) h. Testimonies before committees (Appendix M) Not counted in this litany of meetings, presentations, interviews, opinion pieces, and informal networking have been the hundreds of phone and conference calls, e-mails, and conversations between me and private individuals and public officials across the state. Despite your guidance and my best intentions, you and I both know that almost a third of these communications have been reactive rather than proactive due to multiple rumors, accusations, insinuations, complaints, and charges intended to question system authority and oversight; immobilize the implementation of Pathways; suggest Board violations of the open meetings law; accuse me of bullying and intimidation; and raise questions regarding SBHEs legislative authority. I am dismayed and disappointed in this outcome particularly since it has devolved into the politics of personalism which has taken a toll on both my wife and me. Together we have

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faced a persistent pattern of harassment and humiliation attributed as misdeeds on our part for failing to understand and appreciate the North Dakota culture. Notwithstanding these dysfunctional behaviors, I stand proud of my accomplishments. Despite the negativity that has transpired in the media, the legislature has recommended an unprecedented infusion of new monies for the University System. The most critical component of this budget approval process was based on the support of a legislative leadership group who had been the harshest critics of higher education and university system in at least the past decade. Without their support, the results would have been much different. It is evident from reading the bills particulars that the clear intent of the Legislature is to ensure that the NDUS becomes a unified system and not just a shell of good intentions. This has been the principal message I have been communicating over and over again these past ten months through numerous interviews and opinion pieces. With an 11.9% permanent base funding increase; a $44.4 million one-time increase; a $129 million increase in major capital projects; a $9.9 million permanent base funding increase for the System Office; $50.4 million in one-time net changes; a 4% average salary increase for the first year of the biennium and 3% for the second year; and 1% employee and employer retirement contribution during the first year of the biennium, the Legislatures response to my efforts is unmistakable. This is a turnaround of epic proportions for which I am greatly pleased and deeply appreciative. But the work has only just begun for both of us. As stewards of this important new investment in the states future, our obligationyours and mineis now to ensure that we spend these monies prudently and with wisdom; that educational and workforce opportunities are made available to all our citizens; and that the improved quality and reputation of our graduates can and shall be measurably demonstrated in the years ahead (Appendix N). Change is never easy and those who work to raise the bar for students, faculty, and leadership are much needed if we are to compete in this global economy. With your support, we have together made sizable steps toward goals that have long-term benefits for the state and its people. Remember, however, this is only year one. Many more years remain if we are to succeed in realizing our goals. Competitiveness in the world today demands much from each of us. It requires higher standards, ever-expanding learning outcomes, greater efficiencies, life-long learning, assessment, and accountability at all levels. As we end the academic year and look ahead to the next, I would like to offer the following goals for your consideration: 1. Continued implementation of the Pathways to Student Success concept. 2. Work with the presidents to plan and develop a set of campus specific accountability measures for retention and graduation as well as for the reduction of remedial/development coursework.

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3. Prior to utilizing the Legislatures generous infusion of additional FTE to support a more unified system, I intend to undertake a thorough study of the System Office, followed by the appropriate reorganization of roles and functions to improve overall system efficiency. 4. Inasmuch as communication is the key to effective governance, my overarching goal and objective will be to improve this aspect of my responsibilities and obligations to the state, its citizens, and the academic communities of the eleven public colleges and universities. I cannot end this letter without expressing my deepest appreciation for the Boards support, your endorsement of the changes that I have brought to you for approval, your encouragement amid cries of complaint, and your obvious dedication to the values we together hold dear. Regards,

H.A. Shirvani, Ph.D. Chancellor

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APPENDIX A

APPENDIX B

APPENDIX C

APPENDIX D

APPENDIX E

APPENDIX F

APPENDIX G - M

Interviews*with*Newspapers*Editors*(Appendix*G)* August&14&Grand&Forks&Editorial&& August&14&Fargo&Forum& November&29&Ryan&Johnson&& December&12&Ryan&Johnson& April&24&Ryan&Johnson& There&are&many&other&unplanned&calls&or&emails&by&the&reporters&which&were& responded&to&but&they&were&not&put&on&your&calendar&because&they&were&last& minute& & Radio*Interviews*(Appendix*H)* August&15&Joel&Heitkamp& August&22&Scott&Hennen&Show& September&7&Christopher&Gabriel& October&3&Chris&Berg& December&12&Chris&Berg& December&13&Scott&Hennen& January&1&Christopher&Gabriel& January&14&Chris&Berg& January&16&Scott&Hennen& January&18&Scot&Hennen& February&4&Scott&Hennen/Joel&Heitkamp& February&6&Joel&Heitkamp/Scott&Hennen& February&7&Chris&Berg& February&11&Chris&Gabriel& February&20&Dale&Wetzel& February&25&Dale&Wetzel& March&2&Dale&Wetzel& March&4&Christopher&Gabriel& April&1&Dale&Wetzel& April&9&Chris&Berg& * Presentations*to*Students*and*Faculty*(Appendix*I)* September&11&Meeting&with&Council&of&College&Faculties&&Conference&Call& September&21&Meeting&with&NDSA&&Valley&City& December&8&Meeting&with&UND&Staff&Senate&&Grand&Forks& January&25&Meeting&with&NDSA&&Bismarck& February&14&Meeting&with&NDSA&&Bismarck& April&9&Meeting&with&Council&of&College&Faculties&&Conference&Call& April&26&Meeting&with&NDSA&President&and&3&Executive&Officers&Y&Bismarck& & Presentations*to*KA12*Superintendents,*Principals,*Counselors*and*Teachers* (Appendix*J)* October&24&Carrington&HS&&

& Presentations*to*Outside*Clubs*and*Organizations*(Appendix*K)* September&13&ND&Vision&20/20&Y&Bismarck& September&14&Minot&Board&of&Regents&&Minot& October&3&Bismarck&Rotary&&Bismarck& October&4&ND&Chamber&of&Commerce&Y&Bismarck& October&10&Joint&Commission&on&Admission&Meeting&&Bismarck& October&11&NDUS&Arts&&&Humanities&Summit&&Valley&City& October&17&Grand&Forks&Lions&Club&&Grand&Forks& October&23&Succeed&20/20&Hess&Grant&&Bismarck& October&24&Devils&Lake&Chamber&of&Commerce&&Devils&Lake& November&27&Grand&Forks&Rotary&Meeting&&Grand&Forks& November&28&VFW&of&Bismarck&Y&Bismarck& January&9&North&Dakota&Association&of&Tribes&Y&Bismarck& February&5&ND&Chamber&Y&Business&Days&at&the&Legislature&Y&Bismarck& March&8&Meeting&with&GF&Officials&&Y&Bismarck& March&12&Succeed&2020&Vision&&Dickinson& April&4&Grand&Forks&Region&EDC&&Grand&Forks& & Social*Interactions*and*meetings*with*legislators*(Appendix*L)* July&30&Y31&Interim&Higher&Education&Committee&&Williston& August&22&Meeting&with&Senator&Rich&Wardner&Y&Bismarck& August&24&Meeting&with&Representative&Scott&Louser&&Bismarck& August&28&Meeting&with&Senator&Kresbach&and&other&legislators&&Minot& September&4&Meeting&with&Legislators&Schaible,&Donald&G.;&Rohr,&Karen&M.;& Christmann,&Randel&D.;&Kreidt,&Gary&L.;&Heller,&Brenda&A.;&Schmidt,&James&& New&Salem& September&13&Meeting&with&Representative&Nathe&and&12&other&BisYMan& legislators&&Bismarck& September&19&Meeting&with&Representative&Skarphol&and&other&legislators&& Bismarck& September&24&Meeting&with&Representative&Hawken&and&other&legislators&& Fargo& September&27&Interim&Higher&Education&Meeting&&Bismarck& October&12&Meeting&with&Representative&Kreun&and&other&legislators&&Grand& Forks&

October&25&Richardton&Taylor&HS& November&16&Washburn&HS& November&16&Minot&HS& November&27&Meet&with&GF&Principals,&Superintendent&and&few&other& administrative&officials&&Grand&Forks& February&8&Flasher&HS& February&8&Elgin&HS&

& Testimonies*Before*Committees*(Appendix*M)* January&14&Senate&Appropriations&SB2003& January&22&Senate&Education&SB2200& January&23&House&Education&Committee&HB1281& January&30&House&Education&HB1328& January&31&House&Govt&and&Veterans&Affairs&HB1219& February&6&House&Finance&and&Tax&HCR3018& February&13&House&Judiciary&Committee&HCR3008& February&18&House&Education&Committee&HB1281& March&11&House&Education&Committee&SB2200& March&12&House&Industry,&Business&and&Labor&SB2218& March&18&House&Education&Committee&SB2003& March&25&House&Education&Committee&SB2200& March&27&House&Education&Committee&discussion& March&28&House&Education&Committee&discussion& April&27&Conference&Committee&SB2200& April&27&Conference&Committee&SB2003& & & &

October&15&Meeting&with&Representative&Skarphol&and&Kathy&Neset&& Bismarck& October&16&Interim&Higher&Education&Meeting&&Bismarck& October&22&Meeting&with&Rep&Skarphol&&Williston& October&25&Meeting&with&Rep&Kempenich&and&other&legislators&&Dickinson& November&11&Meeting&with&Senator&Holmberg&&Bismarck& December&3&Reception&for&Legislators&(hosted&by&UND)&&Bismarck& December&9&Meeting&with&Rep&Grande&&Bismarck& January&14&Higher&Education&Dinner&&Governors&Residence&&Bismarck& January&16&Meeting&with&Senator&Wardner&&Bismarck& February&6&MHEC&Commissioners&Dinner&&Bismarck& February&5&Meeting&with&Senator&Robinson&&Bismarck& February&5&Meeting&with&Senator&Wardner&&Bismarck& February&4&Meeting&with&Representative&Rosco&Streyle&&Bismarck& January&28&Meeting&with&Representative&Delzer&&Bismarck& February&20&Meeting&with&Senator&Joel&Miller&&Bismarck& February&28&Meeting&with&Representative&Dosch& April&17&Meeting&with&Senator&Robinson& April&18&Meeting&with&Representative&Heller&and&Skarphol& April&18&Meeting&with&Senator&Wardner& Many&other&formal&meetings&with&legislators&

APPENDIX N

Monday,(May(6,(2013(8:44:25(AM(Central(Daylight(Time

Subject: Higher'Education'Budget Date: Friday,'May'3,'2013'3:44:52'PM'Central'Daylight'Time From: To: Chancellor'H.A.'Shirvani ham.shirvani@NDUS.EDU

A message from NDUS CHANCELLOR

Dear Colleagues: I am pleased to report that the legislative conference committees have passed an unprecedented budget that supports higher education and recognizes your dedication to our students. We are extremely grateful that they listened attentively and carefully considered all the information we provided as they made their decisions. In particular, I would like to express my deepest appreciation to the members of the SB2003 Conference Committee: Senators Holmberg, Krebsbach and Robinson and Representatives Skarphol, Martinson and Williams; and SB2200 Conference Committee members: Senators Flakoll, Holmberg and Heckaman and Representatives Skarphol, Dosch and Williams. I won't say the journey was easy, but I will say that I am proud of the destination we have reached. In a nutshell, we have been granted the following funding: NDUS (excluding NDSU Ag Research and Extension) 13-15 general fund appropriation increase/decrease compared to 11-13 adjusted base appropriation Permanent base funding increase One-time increase Major capital projects $72.4 million $44.4 million $129 million 11.9%

Capital Projects 2013-15 2011-13 Increase 176,423,263 (including the $10M deferred maintenance pool and $5,483,413 capital contingency pool) 47,136,000 129,287,26

System Office Permanent Base funding net changes One-Time net changes $9.9 million $50.4 million

Employee Compensation 4 percent average salary increases for the first year of the biennium and 3 percent for the second year. 1 percent employee and employer retirement contribution increases during the first year of the biennium only. We now have a solid foundation upon which we will build one of the best education systems in the country. Thank you for your support and all that you do for our students. Regards, Ham

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H.A. Shirvani, Ph.D. Chancellor North Dakota University System 600 E Boulevard Ave, Dept 215 Bismarck ND 58505-0230 Ph: 701.328.2974 Fax: 701.328.2961 Email: ham.shirvani@ndus.edu Web: ndus.edu

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