xt77sq8qcb6s https://exploreuk.uky.edu/dips/xt77sq8qcb6s/data/mets.xml Lexington, Kentucky University of Kentucky 20081209 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, 2008-12-09. text Minutes of the University of Kentucky Board of Trustees, 2008-12-09. 2008 2011 true xt77sq8qcb6s section xt77sq8qcb6s 
AGENDA Meeting of the Board of Trustees University of Kentucky 1:00 P.M. December 9,2008 18th Floor Patterson Office Tower
Roll Call
Approval of Minutes (Consent)
Minutes - October 14, 2008
President's Report and Action Items
PR 1	President's Report to the Trustees
PR 2	Personnel Actions (Consent)
PR 3	University of Kentucky Gluck Equine Research Foundation, Inc. Amendment to
	Articles of Incorporation and Bylaws
PR 4	Establishment of Engineering Alumni Association Professorship
Academic	Affairs Committee Report
AACR1	Candidates for Degrees
AACR2	Candidates for Degrees - Bluegrass Community and Technical College
AACR3	Establishment and Naming of the Barnstable Brown Kentucky Diabetes and Obesity
	Center
Finance Committee Report	
FCR 1	Alltech, Inc. Pledge (Consent)
FCR2	Barnstable Brown Party Diamond Derby, Inc. Gift and Pledge (Consent)
FCR 3	HGG Family Foundation Pledge (Consent)
FCR 4	Acceptance of Interim Financial Report for the University of Kentucky for the Three
	Months Ended September 30, 2008
FCR 5	2008-09 Budget Revisions
FCR 6	Renovate/Expand the Center for Applied Energy Research
FCR 7	Digital Village Building #2
FCR 8	Renovate Wildcat Lodge
FCR 9	Approval of the 2007-08 Endowment Match Program Annual Report
FCR 10	Patent Assignment Report
FCR 11	Capital Construction Report
Investment Committee Report
Nominating Committee Report


 

Student Affairs Committee Report University Health Care Committee Report
UHCCR 1 UK Healthcare Risk Management Committee Other Business
Athletic Association Board of Directors Report - Dermontti Dawson Adjourn


 

Minutes of the Meeting of the Board of Trustees of the University of Kentucky, Tuesday, December 9, 2008.
The Board of Trustees of the University of Kentucky met at 1:00 p.m. (Lexington time) on Tuesday, December 9, 2008, in the Board Room on the 18th Floor of Patterson Office Tower.
A. Meeting Opened
Ms. Mira Ball, chair, called the meeting to order at 1:07 p.m. and asked Ms. Barbara Jones, assistant secretary of the Board, to call the roll.
B. Roll Call
The following members of the Board of Trustees answered the call of the roll: Mira Ball (chair), Stephen Branscum, E. Britt Brockman, Penelope Brown, Jo Hern Curris, Dermontti Dawson, Ann Haney, James Hardymon, Everett McCorvey, Billy Joe Miles, W. Tyler Montell, Sandy Bugie Patterson, Phillip Patton, Charles R. Sachatello, Frank Shoop, JoEtta Wickliffe, Russ Williams, and Ernest Yanarella. Absent from the meeting were Pamela May and Erwin Roberts. 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 Karpf, and General Counsel Barbara W. Jones.
The university faculty was represented by Chair of the University Senate Council David Randall, and the university staff was represented by Chair of the Staff Senate Bart Miller.
Members of the various news media were also in attendance.
C. Consent Items
Ms. Ball called attention to the consent items on the agenda which included the minutes, personnel actions, and three items listed in the Finance Committee Report. She asked if there were any questions or corrections. Dr. Sachatello moved approval. Mr. Branscum seconded the motion, and it carried without dissent. (See consent items listed below at the end of the agenda.)
Minutes - October 14, 2008 PR 2   Personnel Actions FCR 1 Alltech, Inc. Pledge
FCR 2 Barnstable Brown Party Diamond Derby, Inc. Gift and Pledge FCR 3 HGG Family Foundation Pledge


 

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D.      President Lee T. Todd, Jr. Announcements
President Todd made some announcements before reviewing PR 1. He informed the Board that an e-mail would be sent to the employees later that afternoon announcing that January 2, 2009 would be an extra paid holiday this year for eligible faculty and staff. He noted that the announcement does not apply to the hospital because it is difficult to extend that benefit to the hospital staff. The hospital staff has other benefits that they receive, and this is part of the equalization program.
President Todd noted that December 24 had already been announced as an extra holiday this year. While the staff could not be financially awarded with salary increases during the 2008-09 fiscal year, the extra two holidays is a way of expressing appreciation to them. It will also allow them to have more time with their families and to possibly attend the Liberty Bowl in Memphis and support the football program.
President Todd announced that the medical campus had collaborated with dozens of health care providers in going tobacco-free on November 20 in Lexington. He said that he was proud to announce that those same steps will be taken to eliminate the use of tobacco from the rest of the campus. He has appointed Dr. Ellen Hahn, a College of Nursing faculty member and director of UK's tobacco policy research program, and Anthany Beatty, assistant vice president for campus services, as co-chairs of the university's Tobacco-free Task Force. He thanked them for their willingness to serve in this capacity. He noted that he will be working with them to select other members of the task force. The task force will be responsible for developing the new tobacco-free policy as well as putting together a timeline for its implementation.
Dr. Hahn has done a yeoman's service across the state of Kentucky in working with communities who are considering going tobacco-free. She has had conferences in Lexington for 50 or 60 different counties. The purpose of the conferences was to learn about what has been done in Lexington. Shortly after the conferences, two or three of those counties became tobacco-free. President Todd said that he is proud of the hospital for taking the initiative and setting a task for the university to do it campus wide.
President Todd informed the Board of another e-mail he had sent to the employees regarding a message to the Council on Postsecondary Education about the impact of an additional 4 percent budget cut. He called attention to a graph that was included in the e-mail, representing the budget cuts and explained the various dots showing six mid-year cuts. He explained that these budget cuts clean out the reserves that are used for deferred maintenance, faculty start-up packages, and other things that come up during the year. He also provided a table showing that the university was cut a total of $88.5 million dollars throughout the budget for 2007-08.
President Todd called attention to a flyer about the presentation of Our Lincoln at the John F. Kennedy Center for the Performing Arts in Washington, D.C. on February 2, 2009. He thanked Dr. McCorvey for presenting Our Lincoln to the United States and said that it will be a proud moment for the state of Kentucky. The Kentucky congressional delegation is excited about attending the event.


 

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E.      President's Report to the Trustees (PR 1)
President Todd began his report in PR 1 by calling attention to Frank Harris, a special gentleman in the audience. He said that he had known Mr. Harris when he was a student and faculty member at the university, and he was pleased to announce that the Grand Ballroom in the UK Student Center has been named for Frank H. Harris.
Mr. Harris served as the Student Center's director from 1966 to 1973 and again from 1980 to 1997. He is the first chairman of the board of directors of the National Entertainment Conference, which is a national organization with more than 1,000 members comprised of colleges, universities, and agencies that provide entertainment, products, and services to colleges and universities. Mr. Harris also served as the Student Government advisor for many years. The National Association for Campus Activities named an award in his honor: the Frank Harris Outstanding Student Government Advisor Award, which is presented annually to an outstanding professional in the field.
President Todd asked Mr. Harris and his wife Elsie to stand and be recognized, following which they received a round of applause. He thanked them for attending the Board meeting and said people would be thinking about them when they are in the ballroom. President Todd recognized former Vice President for University Relations Joe Burch sitting with Mr. Harris and said he was glad to see him on campus.
President Todd reported that the university has received a $10.5 million grant to study obesity, diabetes, and heart disease links. Dr. Lisa Cassis has done a phenomenal job at the UK Graduate Center for Nutritional Sciences, and she will be the principal investigator of the UK Center of Biological Research Excellence (COBRE) in Obesity and Cardiovascular Disease. Dr. Cassis will lead a team of junior investigators, comprising a mix of physicians and basic scientists, and senior researchers who will serve as mentors, advising and overseeing research projects. He said that it is critical that UK do this research. He pointed out that this is a NIH grant, which is hard to get.
Governor Steve Beshear was on campus to announce approximately $14 million worth of EPSCoR funding for an experimental program to encourage states that have not been high in federal funding to become that way by investing money into young faculty members who have not been previously competitive. UK received $7 million of the $14 million.
President Todd reported that the Gatton College of Business and Economics team excelled in the Wall Street Journal's National Biz Quiz at The Ohio State University in mid-November. He and Mrs. Todd took three of the students to lunch recently and had a most enjoyable time with them. The Kentucky students placed fourth out of 24, and UK sophomore Jeffrey Howard of Louisville, who is majoring in accounting, won first place in individual competition among 72 other students. President Todd said that he is very pleased that Dr. Gordon Holbein is the senior lecturer that worked with the team and coached them.


 

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UK now has a Phi Kappa Phi charter to start a chapter. It is the nation's oldest, largest, and most selective all-discipline honor society. President Todd thanked Dr. Doug Scutchfield for spearheading this effort.
UK signed an agreement with Bluegrass Community and Technical College (BCTC) to streamline the transfer process. The number of students transferring to UK was short about two years ago; however, the numbers were up 100 this year over last year. The agreement, now called the BCTCblue+ program, allows Bluegrass Community and Technical College students to take classes at a reduced tuition rate at UK. The students jointly register, and this should get the transfer numbers up.
UK Alumna Beverly Perdue is now the Governor of North Carolina.
Vice President for Commercialization and Economic Development Len Heller worked hard to obtain about $6.5 million from the State Economic Development Cabinet so UK can put redundant power into the Coldstream Research Campus. This is a critically important infrastructure improvement that will make the Coldstream Research Campus very competitive once it is done.
Allylix, Inc. is one of UK's companies that makes high value fragrances and flavors using biotech development. The company licensed the technology developed in the College of Agriculture to a leading clean technology company that plans to develop and commercialize terpene fuels and fuel additives. This is a company that Lexington's Bluegrass Angels invested in with a major deal. UK will receive royalties from the first deal.
Judy "J.J." Jackson, vice president for institutional diversity, is now chair of the new Mayor's Commission on Mortgage Lending Practices, which is vital to segments of the population in Lexington.
Mersive Technologies, Inc. is another start-up company that just received $5 million in venture capital. Last year, there was $65 million invested, and $34 million of that amount was outside venture money. There was zero of that money in Lexington in 2003. Mersive Technologies, Inc. came out of UK's visualization group. It was one of the companies developing technology in UK's computer science engineering department. A lot of researchers will be moving into the new Digital Village building that was announced yesterday. Davis Marksbury, James Hardymon, and Jim McDonald helped with this funding.
The Kentucky Kernel won the 2007-08 Pacemaker award, a prize commonly referred to as the "Pulitzer Prize for college newspapers. A series of articles got them into the competition and allowed them to win. They have won this award several times.
President Todd concluded his report in PR 1 by reporting that UK's Landscape Architecture Department is now officially 15th in the nation. He reiterated a comment that he says often, "We will get to Top 20 one department at a time."


 

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Ms. Ball pointed out that the newly elected Governor of North Carolina, UK alumna Beverly Perdue, is the first female governor of North Carolina.
F. University of Kentucky Gluck Equine Research Foundation, Inc. Amendment to Articles of Incorporation and Bylaws (PR 3)
President Todd said that PR 3 is recommending changes in the articles and bylaws of the Gluck Equine Research Foundation. Basically, it is an effort to correct some titles; to expand the number of members on the board from 25 to 30, which will allow a broader, more inclusive board; and to clarify the duties and obligations of the board members. Since announcing the equine initiatives a few years ago, the population of local thoroughbred farms that want to be actively involved with UK has gone up significantly. He recommended approval of the changes in PR 3 and noted that the changes were approved by the Gluck Equine Research Foundation Board on October 14.
Ms. Ball called for a motion of approval, and Ms. Curris moved approval. Her motion, seconded by Ms. Haney, passed without dissent. (See PR 3 at the end of the Minutes.)
G. Establishment of Engineering Alumni Association Professorship (PR 4)
President Todd said that PR 4 recommends the establishment of an Engineering Alumni Association Professorship. This professorship is similar to the professorships that the Board approved September 16, 2003 and April 22, 2008. It will be funded by Dean Tom Lester of the College of Engineering using discretionary funds that are available to him on a yearly basis, and the amount will be determined by him. Dean Lester has been very successful with the first two professorships, and by adding a third professorship in the College of Engineering, he can be more competitive. Mr. Dawson moved approval of PR 4. Mr. Branscum seconded the motion, and it carried without dissent. (See PR 4 at the end of the Minutes.)
H. Candidates for Degrees (AACR 1)
Dr. Yanarella, chair of the Academic Affairs Committee, reported that the committee met that morning and entertained three recommendations. The first AACR 1 is a recommendation that the president be authorized to confer upon each individual whose name appears on the attached list the degree to which he or she is entitled, upon certification of 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 of the Board of Trustees. He moved approval of AACR 1. Dr. Sachatello seconded the motion, and it carried without dissent. (See AACR 1 at the end of the Minutes.)
I. Candidates for Degrees Bluegrass Community and Technical College (AACR 2)
Dr. Yanarella said that AACR 2 is a recommendation that the president be authorized to confer upon each individual whose name appears on the attached list of degrees for Bluegrass Community and Technical College the degree to which he or she is entitled, upon certification by


 

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Kentucky Community and Technical College System Board and the University of Kentucky registrar. In accordance with the July 1, 2004 Memorandum of Agreement, the University of Kentucky is able to grant degrees through Bluegrass Community and Technical College for those students who were officially enrolled on or before September 2004 and who complete associate degree programs on or before August 31, 2010. Conferring these degrees is a continuation of the practice of the University of Kentucky Board of Trustees. He moved approval of AACR 2. Ms. Brown seconded his motion, and it carried without dissent. (See AACR 2 at the end of the Minutes.)
Dr. Yanarella underlined a point that he made at the committee meeting. Despite the fact that this seems to be such a routine part of the Board's business, the Board is dealing with flesh and blood students and also parents. He pointed out that the Board had the honor of assisting in the conferring of a degree of the daughter of Trustee Ann Haney.
J.       Establishment and Naming of the Barnstable Brown Kentucky Diabetes and Obesity Center (AACR 3)
Dr. Yanarella said that AACR 3 is the recommendation that the Board of Trustees approve the establishment and naming of the Barnstable Brown Kentucky Diabetes and Obesity Center in the College of Medicine. He called attention to the background information in AACR 3 and said that the committee had a marvelous opportunity to also get background information from Dr. Lisa Tannock, director of the Division of Endocrinology in the College of Medicine's Department of Medicine. She also spoke about Dr. Lisa Cassis and her colleagues receiving the COBRE $10.5 million grant and the generosity of the Barnstable family in moving this forward. Dr. Tannock outlined a very vigorous strategy for raising the profile of this center, and she spoke about how propitious a time it is for the University of Kentucky and this center to be engaged in this kind of work not only because of state and federal funding that is developing around this area but also because of the important outreach implications that flow from this. On behalf of the Academic Affairs Committee, Dr. Yanarella moved approval of AACR 3. Ms. Haney seconded his motion, and it carried without dissent. (See AACR 3 at the end of the Minutes.)
K.      Finance Committee Report
Mr. Branscum, chair of the Finance Committee, reported that the committee met at 11:00 a.m. and had 11 reports for action. In addition to the members of the committee, most of the entire Board was present. He said that FCR 1, 2, and 3, which included pledges and gifts totaling $5.48 million, were on the consent agenda. In FCR 1, Alltech, Inc. made a $700,000 pledge to support the UK Opera Program. FCR 2 was the Barnstable Brown Party Diamond Derby, Inc. gift and pledge of $3,784,000 to create and support the Kentucky Diabetes and Obesity Center. FCR 3 was the HGG Family Foundation Pledge of $1 million to create and endow the Paul A. Kearney, M.D. Endowed Chair in Trauma Surgery in the College of Medicine.


 

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L.      Acceptance of Interim Financial Report for the University of Kentucky for the Three Months Ended September 30, 2008 (FCR 4)
Mr. Branscum said that FCR 4 is for the acceptance of the Interim Financial Report for the university for the three months ended September 30, 2008. Treasurer Marc Mathews presented the Interim Financial Report to the committee.
Through September 30, the university has realized 31 percent of the revenue estimate and expended 24 percent of the approved budget. The balance sheet is strong with assets of $3.2 billion and liabilities of $969 million with fund balances of $2.1 billion representing a nearly 65 percent equity position in the total assets.
Revenues of $606.3 million and appropriated fund balances of $81.2 million have exceeded expenditures to date of $529.7 million by $157.7 million, creating a strong cash position and balance sheet as of September 30, 2008.
At the end of the first three months of the 2008-09 Fiscal Year, financial operations are consistent with the budget plan, and the university's financial condition is excellent.
On behalf of the Finance Committee, Mr. Branscum recommended the acceptance of FCR 4. Dr. Brockman seconded the motion, and it carried without dissent. (See FCR 4 at the end of the Minutes.)
M.     2008-09 Budget Revisions (FCR 5)
Mr. Branscum said that Vice President for Planning, Budget, and Policy Analysis Angie Martin presented the budget revisions to the committee. The revisions will increase the university's budget by $22.3 million, or 1 percent, to $2.23 billion. The primary adjustment is to increase budgeted fund balances by $22.1 million. The increase is a result of unspent funds in various reserve accounts related primarily to faculty and staff benefits such as health benefits, post retirement benefits, and workers compensation. On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 5. Mr. Williams seconded the motion, and it carried without dissent. (See FCR 5 at the end of the Minutes.)
N.      Renovate-Expand the Center for Applied Energy Research (FCR 6)
Mr. Branscum said that Vice President for Facilities Management Bob Wiseman presented FCR 6 which requests approval to increase the scope of the renovation and expansion of the Center for Applied Energy Research capital project from $2 million to $3.71 million.
The Board of Trustees approved initiation of this project at the March 4, 2008 meeting. The United States Department of Energy has awarded a $1.37 million grant, and the Governor's Office of Energy Policy has awarded an additional $342,516 grant for a facility to house a refinery which will convert coal and shale oil to liquid that can be used to run internal combustion engines. These grants will fund an engineering and design study and construction of


 

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the shell of the facility. The center will request additional federal funds for the fit out of the facility. 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.)
O.      Digital Village Building #2 (FCR 7)
Mr. Branscum said that FCR 7 recommends approval of the construction of the Digital Village Building #2; acceptance of a pledge of $6 million from The Marksbury Family Foundation and a gift of $328,125 from James F. McDonald to support the construction; authorization for the president to submit the Marksbury pledge, the McDonald gift, and the previously accepted pledge of $2 million from Trustee James F. Hardymon and other non-state General Funds, if necessary, for match from the Research Capital Match Program when those funds become available; and approval of the use of lease/purchase financing, if necessary, to fund the cash flow of the project.
Mr. Branscum mentioned the press conference held on Monday to announce Digital Village Building #2, which is the second of four buildings in the Digital Village, the Hardymon Building being #1. Building #2 will be a 43,000 gross square foot facility housing the research activities of the Center for Visualization and Virtual Environments and selected research activities in the Departments of Computer Science, Electrical Engineering, and Computer Engineering. This facility is estimated to cost $20 million, the legislatively authorized scope. On behalf of the Finance Committee, Mr. Branscum moved approval of FCR 7. Dr. Sachatello seconded the motion, and it carried without dissent. (See FCR 7 at the end of the Minutes.)
P.      Renovate Wildcat Lodge (FCR 8)
Mr. Branscum said that FCR 8 recommends approval to initiate the renovation of the Wildcat Lodge capital project. The Wildcat Lodge is a 20,000 square foot campus residential facility which houses the men's basketball players and other UK students. The facility, which has been in service since 1978, is in need of general refurbishment of the interior finishes, interior lighting improvements in the common areas, and replacement of several non-functional exterior glass doors. This project is estimated to cost approximately $1.5 million and will be funded with private gifts. The furnishings will be comparable to the new dorms. On behalf of the Finance Committee, he recommended approval of FCR 8.
Ms. Ball noted that the Athletic Association Board of Directors approved this recommendation to go forward to the Board of Trustees at its meeting on Monday. She said that she wanted to make sure everybody understood that this project would be funded from private gifts collected by Athletics.
Mr. Shoop said that the Athletic Association Board had a very detailed presentation about the project and noted that this renovation is very much needed.
Mr. Montell seconded Mr. Branscum's motion, and it carried without dissent. (See FCR 8 at the end of the Minutes.)


 

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Q.      Approval of the 2007-08 endowment Match Program Annual Report (FCR 9)
Mr. Branscum said that Ms. Martin presented FCR 9 to the committee. It recommends acceptance of the 2007-08 Endowment Match Program Annual Report, also known as "Bucks for Brains." Pursuant to the Council on Postsecondary Education's guidelines, the university is required to submit an annual report, approved by the Board of Trustees, on UK's participation in the program. As of June 30, 2008, the market value of the endowments created through the Endowment Match Program totaled $412.3 million.
The university has fully matched all available funds from the first three rounds of the Endowment Match Program. The university has received $202.2 million of state funds and $177.5 million of cash gifts. The university has $24.5 million of outstanding pledges, representing only 12.1 percent of the matched state funds.
The university has created 83 endowed chairs, 210 endowed professorships, and 240 endowments to support fellowships, research, and the William T. Young Library. On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 9. Mr. Dawson seconded the motion, and it carried without dissent. (See FCR 9 at the end of the Minutes.)
R.      Patent Assignment Report (FCR 10)
Mr. Branscum said that Vice President of Research Dr. James Tracy gave a detailed explanation and review of the research projects and the Patent Report for the quarter ending September 30, 2008 to the committee. To date, the university has filed 15 patent applications, had 5 patents issued, and has received $397,928 of patent income.
On behalf of the Finance Committee, he recommended acceptance of FCR 10. Dr. Sachatello seconded the motion, and it carried without dissent. (See FCR 10 at the end of the Minutes.)
Dr. Sachatello requested that President Todd invite Dr. Sylvia Daunert, whose name was on five patents submitted, to attend the next Board meeting for formal recognition by the Board.
President Todd agreed to invite Dr. Daunert to the next Board meeting. He noted that she is an outstanding undergraduate mentor and special professor who teaches, does research, gets patents, and takes time to mentor undergraduate students.
S.      Capital Construction Report (FCR 11)
Mr. Branscum said that Mr. Wiseman presented the lengthy Capital Construction Report to the committee. The report was for the three months ending September 30, 2008. During that period, there was 1 new contract, 2 contracts completed, 2 contracts amended, and 24 change orders greater than $25,000.


 

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The new contract was for $2 million with Congleton Hacker Company for the Expand/Upgrade Livestock Disease Diagnostic Lab project.
The 2 contracts completed were:
• The $20.5 million contract with Turner Construction Company for the Student Health Facility project; and
• The $1.7 million contract with Denham Blythe for the Upgrade Fume Hoods T. H. Morgan - Life Safety project.
The 2 contracts amended were:
• $6,770 for additional design services required for revising the north steam tunnel for the Construct Student Health Facility project.
• $1.6 million for additional design fees to complete the design and construction of the Expand/Upgrade Livestock Disease Diagnostic project after additional funding was authorized by the 2008 General Assembly.
The 24 change orders greater than $25,000 were:
• Four change orders totaling $254,461 for the Construct Biological Pharmaceutical Complex project;
• Fourteen change orders totaling $503,574 for the Patient Care Facility project;
• Four change orders totaling $128,223 for the Patient Care Facility CUP Expansion project;
• One change order of $74,833 for the Expand Chemistry-Physics Building -Laboratory Renovation project; and
• One change order of $29,719 for the Upgrade Fume Hoods T.H. Morgan - Life Safely project.
Mr. Branscum said that all of the change orders are within the change contingent budget. On behalf of the Finance Committee, he recommended acceptance of FCR 11. Ms. Curris seconded the motion, and it carried without dissent. (See FCR 11 at the end of the Minutes.)
T.      Other Business - Finance Committee
Mr. Branscum said the committee received an update and review of a long-term plan to meet student demand for improved housing. Over the next 20 years, most of the current housing inventory will be upgraded, and additional facilities will be constructed. Existing facilities will be renovated using university agency bonds, and new facilities will be constructed using private financing.
The university expects to issue a Request for Proposal to interested developers to construct approximately 1,200 beds on the current 10 acre Cooperstown Apartments site. The


 

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Board will be requested to approve the project prior to its initiation. He complimented Mr. Wiseman, Mr. Ben Crutcher, and their staff for the good report.
Mr. Branscum announced that Mr. Wiseman and his team will be presenting an update on the university's sustainability plan at the next Finance Committee meeting.
U.      Investment Committee Report
Ms. Wickliffe, chair of the Investment Committee, reported that the committee met and authorized the Purchasing Division to enter contract negotiations with four new real estate managers to manage value-added and opportunistic real estate allocations. All new managers are hired as a result of an RFP (Request for Proposals) process under the supervision of the university's Purchasing Division.
The Endowment pool had an estimated market value at October 31, 2008 of $697 million. Consistent with the overall market decline, the Endowment lost an estimated -13.6 percent in the month of October and -21.6 percent for the four months ended October 31, 2008.
The recent market downturn underscores the importance of the asset allocation changes the Investment Committee approved in June and is in the process of implementing. As reported previously, the committee approved increasing the exposure to alternative investments by 23 percent and reducing the exposure to traditional stock and bond investments, which are more volatile. The committee approved new allocations to absolute return and real return investments and increased the allocations to private equity and real estate.
The committee discussed the timing of the new asset allocation implementation, which will involve three phases. Phase 1 will occur in December and January and involves the transition to new strategies whose values have declined more than existing US equity and fixed income investments, which will be sold to fund the new strategies. Phase 2 of the transition will be deferred until the US equity market rebounds somewhat, as the new strategies have not experienced losses to the extent of existing US equity and fixed income investments, which will be sold to fund the new strategies. Phase 3 will occur over the next few years as private equity and real estate capital calls are funded.
It is important to note that the time horizon for the Endowment is perpetuity; therefore, the Endowment has the benefit of time to recoup recent market losses. Additionally, spending distributions from the Endowment are calculated at 4.5 percent of the average market value over a 36 month period that ends each December 31st, so distributions in the current fiscal year are not being impacted and distributions for fiscal year 2009-2010 are not