xt741n7xm56w https://exploreuk.uky.edu/dips/xt741n7xm56w/data/mets.xml Lexington, Kentucky University of Kentucky 2010 minutes  English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 2010-06-08 text Minutes of the University of Kentucky Board of Trustees, 2010-06-08 2010 2012 true xt741n7xm56w section xt741n7xm56w Minutes of the Meeting ofthe Board of Trustees of the University of Kentucky, Tuesday,
June 8, 2010.
The Board of Trustees of the University of Kentucky met at 1:00 p.m. (Lexington time) on
Tuesday, June 8, 2010 in the Board Room on the 18m Floor of Patterson Office Tower.
A. Meeting Opened
Ms. Mira Ball, chair, called the meeting to order at 1:15 p.m. and asked Ms. Barbara Jones,
assistant secretary ofthe Board, to call the roll.
B. Roll Call
The following members of the Board of Trustees answered the call ofthe roll: Mira Ball
(chair), Stephen Branscum, E. Britt Brockman, Penelope Brown, Jo Hem Curris, Dennontti Dawson,
Carol Martin "Bill” Gatton, Ann Haney, Everett McCorvey, Billy Joe Miles, Sandy Bugie Patterson,
Robynn Pease, Charles R. Sachatello, Frank Shoop, Ryan Smith, James W. Stuckert, Emest
Yanarella, and Barbara Young. Absent from the meeting were Pamela T. May and Erwin Roberts.
Ms. Jones announced that a quorum was present.
The university administration was represented by President Lee T. Todd, Jr., Provost Kumble
Subbaswamy, Executive Vice President for Finance and Administration Frank Butler, Executive Vice
President for Health Affairs Michael Karpft and General Counsel Barbara W. Jones.
The university faculty was represented by Chair of the University Senate Council Hollie
Swanson, and the university staff was represented by Chair ofthe Staff Senate Bryan Back.
Members ofthe various news media were also in attendance.
C. Consent Items
Ms. Ball called attention to the consent items which included the minutes, PR 2 Personnel
Actions, and acceptance of a pledge and gifts. Mr. Stuckert moved approval of the consent items.
Ms. Haney seconded the motion, and it carried without dissent. (See consent items listed below at
the end of the Minutes.)
Minutes — April 27, 2010
PR 2 Personnel Actions
FCR 1 Alliance Resource Partners and Alliance Holdings Pledge
FCR 2 Gift from the Estate of Joanne I. Bell
FCR 3 Don Jacobs Charitable Foundation, Inc. Gift

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D. President’s Report (PR 1)
President Todd called attention to the following items in PR 1:
UK Confers Nearly 7 000 Degrees at 143rd Commencement
Nearly, 7,000 candidates for undergraduate, graduate, and professional degrees were honored at the
University of Kentucky’s 143rd Commencement in Rupp Arena on May 8, 2010. David C. Novak,
Chainnan, CEO, and President of Yum! Brands Inc., was the Commencement speaker.
President Todd announced that UK will have its first December graduation ceremony this year.
New UK Institute Will Train Next Generation of Power and Energy Engineers
The UK College of Engineering has received nearly $2.5 million from the U.S. Department of
Energy to establish a new institute to train the next generation of power engineers. This fits into the
strategy that energy has got to be one of the real components ofthe Top 20 push going forward.
Energy is an important area for the state. Electrical and Computer Engineering Professor L. E.
Holloway is to be congratulated on receiving this amount of money for the university.
Toyota USA Foundation Gives $500,000 to Program to Improve Math Science Teaching
Toyota USA Foundation has awarded a $500,000 grant to a UK program designed to help K-12
teachers develop more effective methods of teaching math and science in 13 central and northern
Kentucky urban school districts. John Yopp and Mary John O’Hair receive a lot of credit for the
university getting this gift. This is the largest gift that Toyota’s Foundation awards.
National Science Foundation Chooses Five UK Students for Graduate Research Grants
Five UK students will receive $100,000 govemment-funded National Science Foundation (NSF)
Graduate Research Fellowships to support research-based master’s or doctoral degrees.
Coalition Report Regales Three UK Spinoff Finns for Using Grants for Economy Gains
UK spinoff companies Allylix Inc., Mersive Technologies, and AllTranz Inc. are featured in a report
released by The Science Coalition. The report suggests that one of the best ways the United States
can foster long-tenn economic growth is through investment in the basic research that leads to
innovation and job creation. These three companies have been in fonnation at UK. They come out
ofthe College of Agriculture, College of Engineering, and College of Phannacy.
Three UK Students are Recognized by Prestigious Two-year Goldwater Scholarships
Three UK students were recognized by the Bany M. Goldwater Scholarship and Excellence in
Education Program. One was named a Goldwater Scholar, and two other students received honorable
mention.
Student is Named 2010 Beckman Scholar Gets $19,300 to Support Research
Agriculture biotechnology junior Philip Houtz has been named the 2010 Beckman Scholar at UK and
will be given $19,300 over 14 months to support his own scientific research project. Professor Bruce
Webb, Department of Entomology, has been the mentor for Mr. Houtz.

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President Todd noted that Dr. Yanarella was presented the 2010 William E. Lyons Award for
Outstanding Service by the UK Martin School for Public Policy. There is only one person selected
each year to receive this award. Dr. Yanarella received a round of applause from the Board.
E. Appointment of Dean ofthe College of Fine Arts (PR 3)
President Todd recommended that Dr. Michael S. Tick be appointed as Dean ofthe College of
Fine Arts, effective July 1, 2010.
Dr. Tick is currently the Chair ofthe Department of Theatre at Louisiana State University and
the producing artistic director of Swine Palace, which is a non-profit professional company serving
greater Baton Rouge and supporting the educational mission of the department. Dr. Tick has a
history of fundraising.
Ms. Haney moved approval of PR 3. Ms. Patterson seconded her motion, and it carried
without dissent. (See PR 3 at the end of the Minutes.)
F. Appointment of Vice President for Student Affairs (PR 4)
President Todd recommended that Dr. Robert C. Mock, Jr. be appointed as Vice President for
Student Affairs, effective July 1, 2010. He infonned the Board that there were approximately 70
candidates for this extremely important position.
Dr. Mock was very impressive throughout the entire interview. He is currently the Associate
Vice Provost for Student Affairs at the University of Arkansas where he has spent a lot of his career.
Mr. Smith moved approval of PR 4. Mr. Stuckert seconded the motion, and it carried without
dissent. (See PR 4 at the end ofthe Minutes.)
G. Reappointment to Board of Directors University of Kentucky Research Foundation
{PR 5)
President Todd said that PR 5 is the recommendation that the Board of Trustees approve the
reappointment of Hollie Swanson to the Board of Directors ofthe University of Kentucky Research
Foundation (UKRF) for a three-year tenn ending June 30, 2013. Dr. Swanson has been serving on
the UKRF Board and has done a fine job. She is also the newly elected chair ofthe University Senate
Council.
Mr. Shoop moved approval of PR 5. Mr. Branscum seconded the motion, and it carried
without dissent. (See PR 5 at the end of the Minutes.)
President Todd congratulated Dr. Swanson and said he looked forward to working with her.

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H. Naming of University Property (PR 6)
President Todd said that the recommendation is that the Board of Trustees approve changing
the name of the Livestock Disease Diagnostic Center building on Newtown Pike to the University of
Kentucky Veterinary Diagnostic Laboratory. This name change was requested by the College of
Agriculture Dean Scott Smith. With some funding from the state government, the Center will be
expanded before the World Equestrian Events. The Center is vital to the equine industry.
Mr. Gatton moved approval of PR 6. Mr. Dawson seconded the motion, and it carried
without dissent. (See PR 6 at the end of the Minutes.)
I. Approval of Patent License Agreement (PR 7)
President Todd said that PR 7 is a unique situation. Dr. Brockman had an idea that he shared
with professors in engineering, and they came up with an idea that was patentable. This
recommendation is to follow University policy for Board members doing business with the institution
and make sure that there is full transparency. The Ethics Committee has reviewed it, and it is an
admirable thing to take place. President Todd encouraged more Board members with ideas to do the
same.
He recommended that the Board of Trustees approve the draft license agreement between the
University of Kentucky Research Foundation and Brockman-Hasting, LLC, a limited liability
company which is owned in part by Board of Trustees member Dr. Brockman. The license
agreement grants patent rights for an implantable intraocular pressure sensor invented through the
collaborative efforts of Dr. Brockman and UK employees.
Mr. Stuckert moved approval. His motion, seconded by Ms. Curris, passed without dissent.
Dr. Brockman abstained from voting. (See PR 7 at the end ofthe Minutes.)
J. Candidates for Degrees (AACR l )
Penny Brown, chair ofthe Academic Affairs Committee, said that AACR l is a
recommendation that the president be authorized to confer upon each individual whose name appears
on the list the degree to which he or she is entitled, upon certification by the university registrar that
the individual has satisfactorily completed all requirements for the degree for which the application
has been made and as approved by the elected faculty of the University Senate and the Academic
Affairs Committee ofthe Board of Trustees.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval of AACR l. Dr.
Sachatello seconded her motion, and it carried without dissent. (See AACR l at the end ofthe
Minutes.)

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K. Candidates for Degrees — Westem Kentucky University/University of Kentucky Joint
Engineering Programs (AACR 2)
Ms. Brown said that AACR 2 is the recommendation that the president be authorized to
confer upon each individual whose name appears on the list the degree to which he or she is entitled
upon certification by the university registrar that the individual has satisfactorily completed all
requirements for the degree for which application has been made and as approved by the elected
faculty ofthe University Senate and the Academic Affairs Committee ofthe Board of Trustees.
This is a joint program with Westem Kentucky University (WKU) and the University of
Kentucky. This program was developed to encourage the efficient resources to meet the statewide
demand for engineering professionals. The diplomas will be awarded at WKU.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval of AACR 2. Her
motion, seconded by Mr. Dawson, carried without dissent. (See AACR 2 at the end of the Minutes.)
L. Candidates for Degrees — Bluegrass Community and Technical College (AACR 3)
Ms. Brown said that AACR 3 is a recommendation for the candidates for degrees at the
Bluegrass Community and Technical College. There are four students graduating. The
recommendation is that the president be authorized to confer upon each individual whose name
appears on the list the degree to which he or she is entitled, upon certification by the Kentucky
Community and Technical College System (KCTCS) Board and the University Registrar that the
individual has satisfactorily completed all requirements for the degree for which application has been
made and as approved by the elected faculty of the University Senate and the Academic Affairs
Committee ofthe Board of Trustees.
On behalf of the Academic Affairs Committee, she moved approval of AACR 3. Dr. Pease
seconded her motion, and it carried without dissent. (See AACR 3 at the end of the Minutes.)
M. Academic Degree Recommendation (AACR 4)
Ms. Brown said that AACR 4 is the recommendation that the Board of Trustees approve the
establishment of a Bachelor of Arts/Bachelor of Science with a mzq or in Japanese Language and
Literature in the College of Arts and Sciences, effective Fall 2010 semester. Interest in Japan
throughout the state and among University of Kentucky students has been very strong for some time.
The massive economic and cultural impact of the Japanese corporate presence in Kentucky over the
last 20 or so years is one maj or source for this interest.
This program has the approval of the appropriate councils and the University Senate and has
completed the 45-day review by the Council on Postsecondary Education. The provost ofthe
University supports this recommendation.
On behalf ofthe Academic Affairs Committee, Ms. Brown moved approval. Dr. Yanarella
seconded the motion, and it carried without dissent. (See AACR 4 at the end of the Minutes.)

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N. Change in Degree — College of Agriculture (AACR 5)
Ms. Brown said that AACR 5 recommends that the Board of Trustees approve the following
actions, effective in the Fall 2010 semester:
• Change the name of the Master of Science degree in Animal Sciences with a major in
Animal Sciences to Master of Science degree with a major in Animal and Food
Sciences.
• Change the name of the Doctor of Philosophy degree with a major in Animal Sciences
to Doctor of Philosophy degree with a major in Animal and Food Sciences.
This proposal has the approval of the Graduate Council, Senate Council, and University
Senate, and the provost supports the recommendation.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval of AACR 5. Mr.
Shoop seconded the motion, and it carried without dissent. (See AACR 5 at the end of the Minutes.)
O. Change in Degree — College of Education (AACR 6)
Ms. Brown said that AACR 6 is a recommendation that the Board of Trustees approve a
change in the name of the Master of Science in Education degree with a major in Education —
Secondary Education to Master of Science in Education degree with a major in Science, Technology,
Engineering, and Mathematics Education.
This proposal has the approval of the Graduate Council, Senate Council, and University
Senate. The provost also supports this recommendation.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval. Ms. Haney
seconded the motion, and it carried without dissent. (See AACR 6 at the end of the Minutes.)
P. Change in Degree — College of Fine Arts (AACR 7)
Ms. Brown said that AACR 7 is a recommendation that the Board of Trustees approve a
change in the name of the Doctor of Philosophy degree with a mzq or in Musicology to Doctor of
Philosophy degree with a major in Musicology and Ethnomusicology, effective in the Fall 2010
semester.
On behalf ofthe Academic Affairs Committee, Ms. Brown moved approval. Ms. Patterson
seconded the motion, and it passed without dissent. (See AACR 7 at the end ofthe Minutes.)

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Q. Establishment ofthe Center for Interprofessional Healthcare Education Research and
Practice (AACR 8)
Ms. Brown said that AACR 8 is a recommendation that the Board of Trustees approve the
establishment of the Center for Interprofessional Healthcare Education, Research, and Practice in the
Office of the Provost. The primary work ofthe Center will be to design, facilitate, coordinate,
promote and evaluate Interprofessional Healthcare Education, Research, and Practice.
The proposal has been reviewed and recommended by the Senate Committee on Academic
Organization and Structure and the Senate Council. The University Senate approved the proposal
based upon its academic merits. The Senate did not endorse the establishment ofthe Center based
upon its non-academic merits. The provost ofthe University supports the establishment ofthe
Center.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval of AACR 8. Ms.
Young seconded the motion, and it carried without dissent. (See AACR 8 at the end ofthe Minutes.)
R. Change of Organizational Structure ofthe Graduate Center for Biomedical
Engineering (AACR 9)
Ms. Brown said that AACR 9 is a recommendation that the Board of Trustees approve the
transfer of administrative oversight for the Graduate Center for Biomedical Engineering from the
Graduate School to the College of Engineering, effective July 1, 2010.
The proposal has been reviewed and recommended by the Senate Committee on Academic
Organization and Structure and the Senate Council and recommended for approval by the University
Senate. The provost supports this recommendation.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval of AACR 9. Mr.
Stuckert seconded the motion, and it carried without dissent. (See AACR 9 at the end ofthe
Minutes.)
S. Change in Name of an Educational Unit (AACR 10)
Ms. Brown said that AACR 10 is a recommendation that the Board of Trustees approve the
change in the name ofthe Cardiovascular Research Center to the Dr. Sibu and Becky Saha
Cardiovascular Research Center. Dr. and Mrs. Saha have committed gilts and pledges totaling
$1 million to establish an endowment.
The proposal has been approved by the faculty in the unit, the leadership of the College and
UK HealthCare, and reviewed and endorsed by the Senate Council on behalf ofthe University
Senate. The provost of the University supports this recommendation.

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On behalf ofthe Academic Affairs Committee, Ms. Brown moved acceptance of AACR l0.
Dr. McCorvey seconded her motion, and it carried without dissent. (See AACR l0 at the end ofthe
Minutes.)
T. Proposed Revision to Administrative Regulation: Lecturer Series Faculty {AACR ll)
Ms. Brown said that AACR ll is a recommendation that the Board of Trustees approve the
revision of Administrative Regulation (AR) 2:9, Lecture Series Faculty. The proposed revision
consists of clarifying the procedure, criteria, and conditions for the Lecturer Series. The revision will
help ensure that the University attracts and retains outstanding Lecturer Series faculty and bring to
this series the appropriate professional recognition within the University.
The proposed revision is intended to:
• Clarify that educational units that employ faculty in the Lecturer Series shall establish by
majority vote the maximum number or percentage of Lecturer Series faculty that may be
employed by the unit,
• Require faculty in the Lecturer Series to hold a tenninal degree or professional experience
appropriate to the field of assignment,
• Require regular faculty perfonnance reviews (annually for faculty at the rank of Lecturer and
biannually for Senior Lecturers),
• Pennit rolling contracts of up to two (2) years for faculty employees at the rank of Lecturers
and up to three (3) years for Senior Lecturers after an initial four-year period of satisfactory
perfonnance, and identify a process of intervention when a faculty employee on a rolling
contract receives an unsatisfactory perfonnance review.
On behalf of the Academic Affairs Committee, Ms. Brown moved approval of AACR ll.
Ms. Haney seconded the motion, and it carried without dissent. (See AACR ll at the end ofthe
Minutes.)
Dr. Yanarella stated that this particular recommendation and proposal went through a very
careful process of review by faculty, and there was a considerable amount of give and take and
negotiations over the final revision. In his opinion, it meets with overall approval ofthe faculty.
U. Finance Committee Report
Mr. Branscum, chair ofthe Finance Committee, reported that the Committee met that
moming with all members present. There were three consent items of gifts and pledges that total
$1.45 million of which $240,000 is eligible to be matched through the Endowment Match Program.
On behalf of the University, he thanked the donors for their generous support. He continued his
report with FCR 4.

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V. Approval of Lease for Department of Social Work (FCR 4)
Mr. Branscum said FCR 4 recommends that the Board authorize the Executive Vice President
for Finance and Administration to negotiate and execute a lease between the University’s Department
of Social Work and Blazer Parkway Venture for space located at 3470 Blazer Parkway in Lexington.
The Department of Social Work has occupied the space since 2002. The total annual cost ofthe lease
is $181,200 for 10,910 square feet of clinical and administrative space. The University advertised this
lease renewal and received no other bids.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 4. The
motion was seconded by Mr. Stuckert and carried without dissent. (See FCR 4 at the end of the
Minutes.)
W. Approval of Lease for Department of Psychiatg (FCR 5)
Mr. Branscum said that FCR 5 recommends that the Board authorize the Executive Vice
President for Finance and Administration to negotiate and execute another lease between the
University and Blazer Parkway Venture for space located at 3470 Blazer Parkway in Lexington.
The Department of Psychiatry has occupied this space since 1999. The rental rate is $18.25
per square foot for 25,474 square feet of clinical and administrative space and $17.75 per square foot
for 546 square feet of support space. The University advertised this lease and received no other bids.
The total annual rate will be $474,592, and this will be funded from clinical revenues.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 5. Mr.
Dawson seconded the motion, and it carried without dissent. (See FCR 5 at the end ofthe Minutes.)
X. Lease-Purchase of High Perfonnance Research Computer (FCR 6)
Mr. Branscum said that FCR 6 is a recommendation for approval to acquire a High
Perfonnance Research Computer which will cost $2.6 million. The supercomputer will be acquired
by lease-purchase, and UK will pay $1.3 million annually for two years.
The current supercomputer lease expires July 31, 2010. A request for proposals for a new
supercomputer was issued, and a committee of faculty assessed the technical and financial responses
to ensure that the selected equipment will meet the needs of research faculty. The Debt Management
Committee has reviewed the acquisition and detennined that it is consistent with the University’s
Debt Policy.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 6. Ms.
Patterson seconded the motion, and it carried without dissent. (See FCR 6 at the end of the Minutes.)

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Y. Acceptance of Interim Financial Report for the University of Kentucky for the Nine
Months Ended March 31 2010 (FCR 7)
Mr. Branscum said that FCR 7 recommends that the financial statements which include the
University and affiliated entities with comparative totals for the nine months ended March 31, 2010
be accepted. A summary ofthe financial statements was provided separately.
The balance sheet remains sound with assets of $3.6 billion, liabilities of $1.1 billion, and
fund balances of $2.3 billion. Since March 2009, fund balances have increased $350 million, or 18
percent, primarily due to an increase of $223 million or 38 percent in endowment funds. Plant funds
have increased $73 million.
During the first nine months ended March 31, 2010, the University has realized 77 percent of
the revenue estimate and expended 68 percent of the approved $2.4 billion budget. Financial
operations are consistent with the budget plan, and the university’s financial condition remains
excellent.
On behalf of the Finance Committee, Mr. Branscum recommended acceptance of FCR 7. His
motion, seconded by Mr. Shoop, carried without dissent. (See FCR 7 at the end ofthe Minutes.)
Z. Patient Care Facility Project (FCR 8)
Mr. Branscum said FCR 8 requests approval to initiate the first phase of construction of the
operating room suite and related support space in the new Patient Care Facility and approval to
increase the total scope ofthe Patient Care Facility proj ect from $532.3 million to $570 million.
The Operating Room project was initially deferred due to the addition of the two patient care
floors. The Operating Room project is now recommended to be initiated to provide capacity for
planned growth and to provide a new consolidated family waiting area for surgical services.
The scope ofthe Operating Room project is not expected to exceed $35 million. The $37.7
million increase in the total scope ofthe Patient Care Facility project is requested in the event of any
unforeseen complications.
The Operating Room project will be funded by an intemal loan of up to $35 million to UK
HealthCare which is expected to be repaid within 10 years. Any additional funds, if needed, will be
provided by UK HealthCare’s fund balances. Pursuant to the University’s Debt Policy, the Debt
Management Committee has reviewed and supports the proposed loan.
Any increase in the $570 million scope will be presented to the Board for approval prior to
implementation.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 8. Mr.
Stuckert seconded the motion, and it carried without dissent. (See FCR 8 at the end of the Minutes.)

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AA. Easement Authorization for Kentucky American Water Company Water Line (Eden
Shale Fann) (FCR 9)
Mr. Branscum said that FCR 9 recommends that the Board authorize the Executive Vice
President for Finance and Administration to convey approximately 3.75 acres for a pennanent utility
easement to the Kentucky American Water Company. The easement will be for the construction of a
water line along the westem boundary of the university’s Eden Shale Fann in Owen County,
Kentucky.
On behalf of the Finance Committee, he recommended approval of FCR 9. Mr. Dawson
seconded the motion, and it passed without dissent. (See FCR 9 at the end of the Minutes.)
BB. Resolution Establishing Authority for Banking and Investment Transactions (FCR 10)
Mr. Branscum said that as a result of National City Bank’s acquisition, PNC Bank’s attomeys
have requested a clarification of prior resolutions approved by the Board. While the prior resolutions
authorized the Treasurer to establish accounts, the resolutions did not explicitly state that the
Treasurer had authority to sign agreements for treasury management services. This resolution makes
this authority explicit rather than implied.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 10. Mr.
Shoop seconded the motion, and it carried without dissent. (See FCR 10 at the end of the Minutes.)
CC. Disposal of Personal Property (FCR 11)
Mr. Branscum said that FCR 11 recommends that the Board approve an annual plan for the
routine disposal of personal property, including the method of disposition. "Personal property”
means moveable or fixed equipment and supplies. The various methods of disposal were listed in an
attachment to the FCR.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 11. Mr.
Gatton seconded the motion, and it carried without dissent. (See FCR 11 at the end of the Minutes.)
DD. Capital Construction Report (FCR 12)
During the quarter ending March 31, 2010, there were four new contracts for design,
two new contracts for construction, one contract was completed, and 45 change orders greater than
$25,000.
The six new contracts were:
• A $1.4 million construction contract with Denham Blythe to renovate the research labs
in the Chemistry-Physics Building,
• A $44,200 design contract with Pearson & Peters Architects for the renovation ofthe
third floor ofthe Little Library,

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• A $150,000 design contract with Stengel-Hill for the renovation of the Nursing
Building;
• A $554,253 design contract with JRA Architects and a $398,000 construction contract
with Codell Construction for the Wildcat Coal Lodge student housing proj ect, and
• A $42,000 design contract with Brown & Kubican to renovate Parking Structure # 3
for UK HealthCare.
In addition, the $888,439 contract with Churchill McGee for the Schmidt Vocal Art Center
was completed.
While the number of change orders appears large, over 30 ofthe 45 change orders are
associated with the patient care facility and total approximately $2.5 million. When the project was
initiated, the Board was advised that there would be many such change orders as the project
progressed.
On behalf of the Finance Committee, Mr. Branscum recommended acceptance of the
quarterly Capital Construction Report. Ms. Haney seconded the motion, and it carried without
dissent. (See FCR 12 at the end ofthe Minutes.)
EE. Patent Assignment Report (FCR 13)
Mr. Branscum said that Vice President for Research James Tracy presented the quarterly
Patent Assignment Report. The report included nine patents. During the quarter that ended
March 31, 2010, the University filed 25 patent applications, 16 patents were issued, and patent
receipts total $1.2 million.
On behalf of the Finance Committee, Mr. Branscum recommended acceptance of the
quarterly Patent Assignment Report. Ms. Curris seconded the motion, and it carried without dissent.
(See FCR 13 at the end ofthe Minutes.)
FF. Approval of Investment in Coldstream Laboratories Inc. (FCR 14)
Mr. Branscum said that FCR 14 is requesting that the Board authorize the president to transfer
up to $6 million to the University of Kentucky Research Foundation to be used for investment in
Coldstream Laboratories, (CLI) Inc. CLI was fonned to expand and commercialize pharmaceutical
manufacturing, research, and development. It is building a client base but has not yet become self-
sufficient. Although CLI had hoped to have a positive cash flow by March 2010, the economic
recession has slowed CLI’s progress. The requested investment will be funded by UK HealthCare.
On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 14. Mr.
Stuckert seconded the motion, and it passed without dissent. (See FCR 14 at the end of the Minutes.)

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GG. Fiscal Year 2010-2011 Operating and Capital Budget (FCR 15)
Mr. Branscum said that Vice President and Treasurer Angie Martin gave a presentation on the
recommended 2010-11 operating and capital budget.
The operating budget totals $2.5 billion, an increase of $38.5 million or 1.6 percent compared
to the current fiscal year. This is the university’s smallest percentage increase on record. The small
increase is primarily caused by limited opportunities for expansion due to lack of additional research
and clinical space.
The change in undesignated general fund revenues totals $8.9 million including a reduction in
state support, increased tuition revenue, and a decline in investment income. The biennial budget
recently passed by the General Assembly reflects a 1.4 percent reduction in state support or $4.4
million.
The undesignated general fund fixed expenses and critical investments total $15.9 million.
One ofthe bright spots in the budget is General Education Refonn. The fiscal year 2010-11 budget
includes $2.7 million to partially fund the new General Education curriculum. This new curriculum
is estimated to cost $5 million when fully implemented, mostly to add small- group sessions to large
lecture classes and to improve the teaching of communication skills.
With $8.9 million of net revenues and $15.9 million of increased expenses, the University is
once again facing a shortfall. This $7 million shortfall will be covered by reallocating base budgets.
Fiscal year 2010-11 will be the third consecutive year that colleges and departments have had
to reallocate funds. The cumulative amount reallocated now totals over $30 million.
In addition, over $17 million ofthe university’s state support will be funded with one-time
federal stimulus funds.
Given the uncertainties that exist, in order to be good financial stewards ofthe university’s
resources, increases in recurring expenses are being held to a minimum. Thus, the budget does not
include base salary increases for the majority ofthe faculty and staff However, a one-time payment
of up to $1,000 for eligible faculty and staff making less than $75,000 is included in the budget.
The uncertainties that continue to exist include additional cuts in state support, when the
national and state economies will recover, and future increases in tuition and fees. The pattem of no
base salary increases for the majority of faculty and staff cannot continue. Unfortunately, the
administration does not foresee any significant increases in additional revenues in the short-tenn, but
that will not erode our resolve.
Mr. Branscum read the statement by President Todd that was so eloquently stated in the
Budget Message, "We remain faithful to the c