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CORVALLIS - Oregon State University President Ed Ray told OSU faculty and staff Tuesday that the university needs to re-evaluate its budgeting process, develop a firm policy on tuition "plateau charges" and increase student retention and graduation rates.

He also outlined a process for continuing OSU's diversity initiatives that will be headed by Terryl Ross, the new director of community and diversity.

Ray's remarks came during Tuesday's University Day celebration, the annual kickoff for OSU's academic year. Several faculty and staff received awards during the event, held at LaSells Stewart Center.

The OSU president praised the faculty and staff for providing students with a quality learning experience despite "coping with substantial resource deficiencies for years." Ray said OSU's new strategic plan would help the university use its limited resources more effectively, but that faculty and staff need to question whether the current budget model is serving that plan.

"My own preference, based on my experience, is for us to seriously consider re-basing budgets," Ray said. "The budget process is not an end in itself; it is a tool for implementing institutional decisions and strategies."

Ray said his goal is to make the budget process open, transparent and responsive to the strategic plan - and called for the university to take three immediate steps by the end of fall term. One is to conclude a campus-wide discussion on what to charge students who take between 12 and 18 credit hours. The so-called "tuition plateau" has been a source of controversy for most Oregon University System institutions during the past year.

"We should either continue to raise plateau range charges to a discount of approximately 50 percent of the charge per credit hour for 12 credits," Ray said, "or we should return to no charge for credits taken in the plateau range."

Ray also called for a university-wide discussion on year-ending fund balances and whether reserves can be applied toward direct financial aid for "our most economically disadvantaged students."

Finally, he challenged the university to consider making additional fees and charges imposed by individual colleges become an explicit part of tuition.

"This would make clearer to students - and their families - the true cost of education in respective majors," Ray said.

"Furthermore, we should make every effort to inform students about proposed tuition increases several years in advance, drawing on predicted state support and cost factors," he added. "Such a policy would help students and their families evaluate the costs of obtaining a degree from Oregon State University and planning accordingly."

Ray also told faculty and staff that the university must continue increasing its fall term retention rate for freshmen, which is at 80 percent, and its six-year graduation rate of 60 percent.

"We simply must do better," he said.

He also noted that retention and graduation rates for minority students are significantly lower and said the university needs to create "a more inclusive and welcoming community both on and off campus" for all students.

Ray praised Larry Roper, OSU's vice president for student affairs, for establishing a model diversity action plan and said Ross would take over the leadership for the initiative and produce the university's first diversity report by spring term.