xt7sqv3c099n https://exploreuk.uky.edu/dips/xt7sqv3c099n/data/mets.xml Lexington, Kentucky University of Kentucky 20000912 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, 2000-09-dec12. text Minutes of the University of Kentucky Board of Trustees, 2000-09-dec12. 2000 2011 true xt7sqv3c099n section xt7sqv3c099n

AGENDA

Meeting of the Board of Trustees
University of Kentucky
3:00 P.M.
December 12, 2000

Irvocation

Roll Call

Approval of Minutes - (Consent)

President's Report and Action Items

PR 1 President's Report to the Trustees
A. A Decade in Review - 1990-2000

PR 2 Personnel Actions

PR 3 Central Administration
A. Proposed Amendment to the Governing Regulations

PR 4 Community College System
A. Candidates for Degrees - Community College System - (Consent)

PR 5 Lexington Campus
A. Candidates for Degrees - University System - (Consent)
B. Appointment of Dean of the College of Agriculture

PR 6 Medical Center (No items to report)

Academic Affairs Committee

1. Establishment of a Center for Sports Marketing
2. Establishment of a Center for Historic Architecture Preservation
3. Establishment of a Center for Micro-Magnetic and Electronic Devices
4. New Degree Program in Exercise Science
5. New Degree Programs in Clinical Laboratory Science

Finance Committee

1. Acceptance of Interim Financial Report for the University of Kentucky for the
Four Months Ended October 31, 2000
2. Disposal of Surplus Property
3. Approval of Lease
4. Capital Construction Report
5. 2000-2001 Budget Revisions
6. Funds for the Operation of Kentucky Healthcare Enterprises, Inc. (KHE, INC.)
7. Anonymous Gift and Pledge
8. Class of 1949 Fellowship Endowment

9. Frank J. Winchester Pledge
10. Establishing Two Professorships From Proceeds From George B. Tuggle Trust
11. Humana Foundation Pledge
12. Jack W. Graham Pledge
13. John R. van Nagell, M.D. Professorship/Chair in Gynecologic Oncology
14. Kentucky River Coal Corporation Pledge
15. Lion Apparel, Inc., Pledge
16. Morton Holbrook Pledge
17. Mrs. W. L. Lyons Brown Gift and Pledge
18. Peter Perlman Endowed Fellowship
19 Paducah Junior College, Inc., Board of Trustees Pledge
20. R.D. and Joan Dale Hubbard Foundation Pledge
21. Ronald McDonald House Charities of the Bluegrass, Inc. Gift
22. Rose Mary C. Brooks Pledge
23. Stonerside Stable Pledge
24. Gifts and Pledges to the Wendell H. Ford Professorship in Public Policy
25. Withington Graduate Student Support Fund Gift and Pledges
26. Resolution of the Board of Trustees of the University of Kentucky ("State Agency") Approving
a Financing/Lease Agreement Among the State Agency, the Kentucky Asset/Liability
Commission, the Commonwealth of Kentucky State Property and Buildings Commission
and the Finance and Administration Cabinet of the Commonwealth of Kentucky for the
Purpose of Providing Interim Financing for an Authorized Project in Anticipation of the
Issuance of Bonds to Provide Permanent Financing for Said Project
27. Resolution of the Board of Trustees of the University of Kentucky accepting the Successful
Bid for the Purchase of $10,450,000 Principal Amount of University of Kentucky Housing
and Dining System Revenue Bonds, Series R, Dated December 1, 2000

Investment Committee Report

Presidential Search Committee Report

Minutes of the Meeting of the Board of Trustees of the University of Kentucky, Tuesday,
December 12, 2000.

The Board of Trustees of the University of Kentucky met at 3:00 p.m. (Lexington time)
on Tuesday, December 12, 2000 in the Board Room on the 18th floor of Patterson Office Tower.

A. Meeting Opened

Billy Joe Miles, Chairperson, called the meeting to order at 3:00 p.m., and the invocation
was pronounced by Mr. Guthrie.

B. Roll Call

The following members of the Board of Trustees answered the call of the roll: Governor
Edward T. Breathitt, Mr. Paul W. Chellgren, Ms. Marianne Smith Edge, Mr. James Glenn III,
Mr. Merwin Grayson, Mr. John "Jack" Guthrie, Dr. Loys L. Mather, Dr. Robert P. Meriwether,
Mr. Billy Joe Miles (Chairman), Mr. Steven S. Reed, Dr. Daniel R. Reedy, Ms. Marian Sims,
Ms. Alice Sparks, Dr. W. Grady Stumbo, Ms. JoEtta Y. Wickliffe, Mr. Billy B. Wilcoxson, Mr.
Russell Williams and Ms. Elaine Wilson. Absent from the meeting were Dr. Elissa Plattner and
Mr. C. Frank Shoop. The University administration was represented by President Charles T.
Wethington, Jr.; Chancellors James W. Holsinger and Elisabeth Zinser; Vice Presidents
Fitzgerald Bramwell, Joseph T. Burch, Ben W. Carr, Edward A. Carter, George DeBin and
Eugene Williams; Dr. Juanita Fleming, Special Assistant for Academic Affairs; Mr. Larry Ivy,
Director of Athletics, and Mr. Richard E. Plymale, General Counsel.

Members of the various news media were also in attendance. A quorum being present,
the Chairperson declared the meeting officially open for the conduct of business at 3:05 p.m.

C. Consent Agenda

Mr. Miles stated that there were three items on the consent agenda:

Approval of Minutes
Candidates for Degrees - Community College System (PR 4A)
Candidates for Degrees - University System (PR 5A)

Mr. Chellgren moved approval of the Consent Agenda. The motion, seconded by Mr.
Guthrie, carried. (See PR 4A and PR 5A at the end of the Minutes.)

D. President's Report to the Board of Trustees (PR 1)

President Wethington stated that PR 1A, "A Decade in Review," will be presented at the
end of his report. President Wethington called attention to the following items in PR 1:

1. The University of Kentucky has agreed to be a University of Promise, a part of the
America's Promise program that General Colin Powell has sponsored across the
country.

- 2 -

2. The Partnership on Research Progress Committee, Chaired by Mr. Billy Joe Miles,
had a very successful conference that focused on the new economy and the University
of Kentucky and it's role in the new economy.

3. The University of Kentucky signed an agreement with Louisville Central High
Magnet Career Academy to enhance the school's ability to prepare students for
careers in banking and business, computer technology, legal and governmental
services and other fields.

4. The University of Kentucky Center for Rural Health received an $800,000 grant to
work with Perry and Harlan counties to prevent and manage common, chronic
diseases.

5. The College of Education honored 70 teachers who made a difference; one of those
was Board of Trustees member Marian Sims.

6. The University's Ecology, Evolution and Behavior Program was ranked 14th among
the nation's 86 programs in a recent ranking by a Vanderbilt University professor.

7. The Kentucky Geological Survey, housed at the University of Kentucky, released a
digital coal atlas that offers detailed maps and charts of the state's coal resources.

8. The University of Kentucky and Georgetown College have finalized an agreement to
permit seniors at Georgetown to pursue graduate degrees in Public Administration at
UK.

9. The UK Graduate School is offering tuition free graduate courses as part of their
G.I.F.T. (Graduate Incentive Free Tuition) program in an effort to attract students to
graduate education.

President Wethington asked the members to read the other items in the report at their
leisure.

E. Personnel Actions (PR 2)

President Wethington recommended that approval be given to the appointments, actions
and/or other staff changes which require Board action; and that the report relative to
appointments and/or changes already approved by the administration be accepted. Ms. Edge
moved approval. The motion, seconded by Mr. Guthrie, carried. (See PR 2 at the end of the
Minutes.)

F. Proposed Amendment to the Governing Regulations (PR 3A)

President Wethington stated that PR 3A is a recommendation that the proposed
amendments to the Governing Regulations be received for preliminary consideration and at the
next regular meeting of the Board of Trustees, be included on the agenda for final action. He
explained that it is designed to bring the University of Kentucky Governing Regulations in-line
with state law. He noted that the definition of "relatives" is changed slightly due to having to

- 3 -

include the exact wording from the statute. He pointed out thatkduring this fiscal year, the
University will have the election of a staff person to the Board of Trustees, a faculty member to
the Board of Trustees, and a student member to the Board of Trustees. President Wethington
stated that these regulations need to be in place so that any person interested in running for or
being considered for the Board of Trustees know that he or she must not have relatives employed
by the University of Kentucky. He expressed his pleasure in recommending PR 3A for the
Board's approval.

Ms. Sparks asked if this amendment is retroactive or will only apply to future candidates
of the Board of Trustees. President Wethington responded this change is to bring the
University's regulations in-line with the statute. He stated that the Attorney General would have
to opine whether or not it will apply to current members.

Chairman Miles asked for a motion before further discussion. Mr. Grayson moved the
approval of this recommendation. Ms. Sparks asked for further clarification of the opinion they
currently have from the Attorney General. President Wethington explained that the most recent
opinion that the University has was not concerning an employee of the University of Kentucky.
Ms. Sparks questioned whether or not this amendment would apply to all Board members. Mr.
Guthrie responded that he understood it to apply to all Board members. President Wethington
agreed with Mr. Guthrie. Mr. Miles asked if the faculty and staff representatives on the Board
understood this amendment. President Wethington explained that every Board member is
included, whether faculty, staff, student or otherwise, by statute. Mr. Williams stated that the
Senate Council has discussed this issue. President Wethington noted that he had sent this item to
the Chair of the Senate Council back in the spring; however, it will be resent to all of the effected
parties prior to its being considered by the Board in January. Mr. Guthrie noted that several
years ago at the University of Louisville, there was a member of the Board of Trustees whose
daughter-in-law was an employee of the university and when the issue came up, the individual
stepped down from the Board. He stated that he was unsure as to whether it is retroactive or not.
President Wethington again stated that this action is to bring the University's regulation in
compliance with the statute and in compliance with the Attorney General's office.
The motion made by Mr. Grayson, seconded by Ms. Wilson, carried. (See PR 3A at the
end of the Minutes.)

G. Appointment of Dean of the College of Agriculture (PR 5B)

President Wethington stated that PR 5B is a recommendation that Dr. M. Scott Smith be
named Dean of the College of Agriculture; Director, Agricultural Experiment Station; and
Director, Cooperative Extension Service (pending the customary agreement with the
Administrator of the Extension Service of the U.S. Department of Agriculture), effective January
1, 2001. President Wethington asked Chancellor Zinser to comment. Dr. Zinser expressed her
pleasure in recommending the appointment of M. Scott Smith as the Dean of the College of
Agriculture as well as Director of the Agriculture Experiment Station and Director of the
Cooperative Extension Service. Chancellor Zinser gave a brief account of Dr. Smith's
background as well as the search process for the new dean.

Dr. Mather moved approval of PR 5B. Dr. Mather commented on the commitment of the
Search Committee and the support of the faculty of the College of Agriculture on the selection of

- 4 -

Dr. Smith. Ms. Wilson seconded the motion, and it passed. (See PR 5B at the end of the
Minutes.)

President Wethington asked for Dr. Smith to stand and be recognized. Dr. Smith
received a round of applause from the Board members. Dr. Smith thanked the Board for their
support.

Governor Breathitt commended Dean Oral Little for his years of service and commitment
to the University of Kentucky. He asked Dean Little to stand and accept a final tribute from the
Board of Trustees. Dean Little received a round of applause from the Board members.

H. A Decade in Review - 1990-2000 (PR IA)

President Wethington stated that it is his intent to give the Board members a snapshot of
some of the key accomplishments of the university, the Board, the administration, the faculty and
staff of the University of Kentucky over the past ten years. He noted that he made a similar
report to the Board in January of 1996. President Wethington made the following presentation.

A Decade in Review

President's Report
To the Board of Trustees
December 12, 2000

America's Neirt Great University University of Kentucky

- 5 -

Academic Excellence

* 41 national rankings
* Increased student
satisfaction
* Highly successful
UK101
* Fall 2000 Retention
Rate - 80.4%, a new
record

America's Next Great Universiy

55
50
45
40
35
30
25

Graduation Rate Since 1995
53.1

95 96 97 98 99

University of Kentucky

Academic Quality of Incoming Freshmen

Over the last 5 years:

* Average ACT composite 3.7
points above national
average
* Average High School GPA at
all-time highs
* National Merit Scholars
averaged 69 per year
* Fall 2000 - largest freshman
class since 1984 maintained
high level of quality

America's Next Great University

University of Kentucky

Endowed Chairs & Professorships

Growth In Endowed Chairs and Professorships

43 45

1998 1999 2000

I a Endowed Chairs * Professorships I

America's Next Great University University of Kentucky

125 -

100-

75 -
50-
25 -

1996

1997

TIM
University of Kentucky

America's NW Great University

- 6 -

Nationally Recognized Research &

Graduate Programs

* 68 Kentucky Opportunity
Fellowships
* 512 Target of Opportunity
Research Assistantships
* Record high 294
Postdoctoral Scholars in
1999400
* Record high $155.2 million
In grant and contract
awards In 1999400
* NSF Ranking - 51 at In
1989-90 to 32nd In 1997-98

America's Next Great University

Science and Engnwilng R&D Expepntures
( prted to the latonel Science Foundation)
1 n~~~~~~~~~~~~~~~$74.0
6161.4

"40 "Z ~~~~~1243"4 7
$118.7

University of Kentucky

Access to Higher Education

Lexington Community College Enrollment
73% hIcesas hi ent"n &m 1969 to 1999
BAAA 6807~~G

* Lees College Acquisition

* Distance Learning Growth
20% over last 5 years

* 365 Robinson Scholars
Identified; 98.4% currently
retained

6000
5000
4000
3000
2000

America's Next Great University

89 90 91 92 93 94 95 96 97 98 99
| Fal Sms |

University of Kentucky

Diversity and Inclusive Learning

* 50 years of the UKAfrican-American Legacy

* Inclusive Learning Community Initiative

* Resident African-American Retention Rate -
72.7% in 1995 to 80.1% in 1999

* African-American Faculty- 18 in 1989-90 to 62
in 1999-00

America's Next Great University University of Kentucky

700

10OuO

- 7 -

Diversity and Inclusive Learning

Total African-American Undergraduate Enrollment
94 1004
1000 862 986 909 931 945
807 2

600 93

200

0
90 91 92 93 94 95 96 97 98 99 00
| * LexaCC AUnivSys
America's Next Great Uniersit University of Kentucky

Diversity and Inclusive Learning

Kentucky Resident African-American Undergraduate Enrollment
1000 - ~~~~~879 891
800-7475

400-35

expenditues, FY 199 0_
200

0
90 91 92 93 94 95 96 97 98 99 00
LxCC Univ Sys
America's Next Grcat Uivwrsity University of Kentucky

Service to the Commonwealth

* $133.1 million in public service
expenditures, FY 1999

* Extends to all 120 Kentucky
counties

* Tremendous Medical Center
expansion

* UK Center for Rural Health #1

America's Next Great University Universitv of Kentuckv

- 8 -

Economic Development

* 8 ASTECC "graduates"

* 10 Coldstream
Research Campus
tenants

* Paducah Engineering
Program

* Center for Rural
Development in
Somerset

America's Next Great University

*WOA 1
$250]

$200]

$1I -

$1 oo --

Contribution to Kentucky Economy In
Today's Dollars of
Out-of-State External Support Obtained
by UK
(in millions)

257.2

274.6

195.1

90-91 95-96 99-00
F Rscal Year

University of Kentucky

William T. Young Library

* $62 million facility

* Information technology hub for

r SX\ IBM5 Kentucky
E 3i_ ;. * Book endowment of $55 million
and growing

* UK libraries now ranked 30th
among public institutions

erica 's Next Great University University of Kentucky

Statewide Technology Leadership

* 1iO of 17 academic centers for
most powerful scientific
computer capabilities

* Supercomputer relative
performance increased by
over 16,000 percent

* Completed 6,000 residence
hall connections

America's Next Great University

A, -

T=
University of Kentucky

- 9 -

Private Giving and Endowment

Private Giving Market Value of
(In millions) $400 University Endowment 371A
so - $350 (in milions) 3

S60 47.6 4 485 _am

$40- 37 2197
31.6 7 1V6
$30 26726.6 161A
1m12A
*20. ~~~~~~~~~~~$100 76.
$10 0

so*. . . . . . . . . 0

America's Next Great University University of Kentucky

A Call to Greatness

* First ever comprehensive fund-
raising campaign

* Support for faculty and
students -

* Academic program excellence

* UK Libraries

* Public Service

* New and renovated facilities

* Campaign Goal $600 million

America 's NeWt Great University UniveTiM of Kentucky

Campus Beautification and Preservation

* Implementation of Physical
Development Plan

* Preservation of Miller Hall
and historic University
buildings

5 Campus gateways and
preservation of green
Amrica's Net ratUiv tUierit fespace

America 's NWoc Great Univershy University of Kentucky

- 10-

Wildcat Athletics

* 41 Academic All-America Team
student-athletes
* Women's and Men's soccer and
women's softball added
* UKAA's commitment to academic
and life skills support $1 million
annually
* $2.6 million Center for Academic
and Tutorial Services
* Annual $3.2 million UKAA
contribution to W.T.Young Library

America's Next Great University

University of Kentucky

Capital Construction

* Initiated 41 major capital
projects totaling $381.8
million
* Community College System
buildings totaling $103.1
million
* Renovations totaling $136.4
million
* Acquisitions totaling $17.6
million
* Over $630 million in total

America's Next Great University

University of Kentucky

Remaining Challenges

* Top 20 public research
institution
* Research space and
equipment
* Undergraduate and
graduate education
* Merit scholarships and
fellowships
* Retention and graduation

America's Next Great University

* Inclusive learning
community
* Faculty and staff
salaries
* Computing and
information technology
* Fair and consistent
state support
* Private funding - capital
campaign
University of Kentucky

- 11 -

President Wethington asked the members to take a closer look at the booklet at their
leisure. He expressed his pleasure in making the report and challenged the Board to continue
making progress in the year 2001 and thereafter. President Wethington entertained questions
from the Board members.

Mr. Reed congratulated President Wethington on the report. He commented that he
noted a couple of references to diversity in the report, which he agrees with. He noted that he
believes the heart and soul of a university is its faculty and its students. He commented that in
the first five years of President Wethington's tenure there was an increase of 43 African
American faculty and in the next five years there was an increase of only one. He noted that the
University was doing something the first five years that worked very well that doesn't seem to be
working now. He stated that at some point, he would like to meet with President Wethington
and learn more of what the University community can do, including the Trustees, to improve the
recruitment and retention of African American faculty. He summarized that if the University of
Kentucky is to become America's next great university, then we will have to find ways to
overcome more basic problems of recruitment and retention of African American faculty.

President Wethington responded that he believes the University of Kentucky is a little
ahead of some institutions in focusing time, attention, and money on the recruitment of African
American faculty; however, he stated that the competition for African American faculty is very
intense. He continued by stating that we have attracted African American faculty, have provided
a good opportunity for them; however, we have seen them be lured away by other institutions.
He noted that we have consistently, over this period of time, provided incentive funds for
departments to recruit and attract African American faculty to the university because this is a
serious goal of the University of Kentucky. He commented that even though we have made
those monies available for the first year salaries of African American faculty members attracted
to the University of Kentucky, we have continually lost faculty to other institutions at higher pay.
President Wethington stated that we need to constantly work on that as one issue, however we
also need to ensure that we are giving attention to the environment on campus. He noted that the
Fifty Years of African American Legacy and the inclusive learning community have helped us
with. He stated that he firmly believes this is a far better place for all of us now than it was ten
years ago. He concluded that these efforts must be constant, but it's difficult to make major
headway when the market is as difficult as it is.

I. Establishment of a Center for Sports Marketing (AACR 1)

Ms. Sparks reported that the Academic Affairs Committee met for the first time earlier in
the day and had a very concise and informative meeting. She noted that the Committee had five
resolutions for the Board's consideration and approval. She stated that AACR 1 is the
establishment of a Center for Sports Marketing. She continued her report by stating that AACR
2 is the establishment of a Center for Historic Architecture Preservation which will focus on
creating new knowledge about Kentucky architecture and landscapes for the purpose of their
preservation. Ms. Sparks stated that AACR 3 is the establishment of a Center for Micro-
Magnetic and Electronic Devices which will bring together, in a formal structure, a core group of
faculty with unique research expertise on micro and nano-scale magnetic and electronic device
design, fabrication, characterization and application. Ms. Sparks continued with ACCR 4, a new
degree program in Exercise Science. She stated that the proposed program is a Ph.D. in Exercise
Science within the KHP Department. Ms. Sparks stated that AACR 5 is a new degree program

- 12 -

in Clinical Laboratory Science. She asked Dr. Holsinger to give a few brief remarks concerning
the last proposal. Dr. Holsinger commented that over the course of the last five years, the
Medical Center has gone through a series of additional degree proposals and this is the last of
that group and it will complete our current list of proposed degree programs. He stated that the
list includes the creation of the Ph.D. program in Rehabilitation Sciences in the College of Allied
Health Professions, the Ph.D. in Gerontology, the Master of Public Health and the Doctor of
Public Health degree programs, a doctorate in Nursing Practice, and the Master Degree in
Physician Assistant Studies.

Ms. Sparks moved approval of ACCR 1-5. Mr. Grayson seconded the motion, and it
passed. (See ACCR 1, 2, 3, 4, and 5 at the end of the Minutes.)

J. Acceptance of Interim Financial Report for the University of Kentucky for the
Four Months Ended October 31. 2000 (FCR 1)

Mr. Chellgren reported that the Finance Committee met earlier in the day and has a full
agenda for the Board to consider. He stated that FCR 1 is the acceptance of the Interim Financial
Report for the University of Kentucky for the Four Months of the Fiscal Year Ended October 31,
2000. He noted that revenues are at 41% of budget with expenses at 33% of budget. He further
noted that there were no particular items that need to be brought to the Board's attention in terms
of revenues, expenses or the balance sheet. Mr. Chellgren moved the adoption of FCR 1. The
motion, seconded by Ms. Wilson, passed. (See FCR 1 at the end of the Minutes.)

K. Disposal of Surplus Property (FCR 2)

Mr. Chellgren stated that FCR 2 and FCR 3 could be dealt with together. He noted that
FCR 2 is a very conventional disposal of surplus properties, which included property from the
College of Allied Health that is going with a professor who has accepted a position at the
University of Arizona. He also noted that FCR 3 is a very conventional lease, some seventeen
months in duration, 4400 square feet of space, with an annual rent of some $73,309. Mr.
Chellgren moved the adoption of FCR 2 and 3. The motion, seconded by Dr. Meriwether,
passed. (See FCR 2 and FCR 3 at the end of the Minutes.)

L. Capital Construction Report (FCR 4)

Mr. Chellgren stated that FCR 4 details the current construction efforts of the University.
He commented that the Finance Committee reviewed five of the projects in detail; the progress
made on the Seaton Center, the new 301-space parking structure, the Mechanical Engineering
building, the Allied Health building, and the early stages of the Bio-Medical Research building.
He reported that all of these projects are moving along well, essentially on time and on budget.
Mr. Chellgren moved the adoption of FCR 4. The motion, seconded by Dr. Reedy, passed. (See
FCR 4 at the end of the Minutes.)

M. 2000-2001 Budget Revisions (FCR 5)

Mr. Chellgren stated that FCR 5 is the quarterly review of the budget and budget
adjustments during the progress of the academic fiscal year. He noted that these revisions are
quite small, less than $700,000 in revenue and expenditures on the general fund and about
$250,000 in income and expenditures on the restricted funds. Mr. Chellgren moved the adoption
of FCR 5. His motion, seconded by Dr. Meriwether, passed. (See FCR 5 at the end of the
Minutes.)

- 13 -

N. Funds for the Operation of Kentucky Healthcare Enterprises. Inc. (KHE. INC.)
(FCR 6)

Mr. Chellgren stated that in 1995, the Board of Trustees approved the creation of a for-
profit corporation by the name of Healthcare Enterprises, Inc. that currently owns and manages
fourteen medical practices that have a significant impact on generating patients for the
University of Kentucky Medical Center and Hospital. He noted that although this for-profit
corporation runs some modest operating losses, it does, in the overall scheme of the Medical
Center and Hospital, run a profit. He explained that this is considered a business development
expenditure, or patient development expenditure, for the Hospital and the Medical Center. He
noted that the acceptance of this resolution would authorize the Hospital to expend $4.5 million,
$2.5 million, and $2.3 million in the next three fiscal years to the Healthcare Enterprises, Inc. He
further noted that the Board of Directors of the Hospital also supports this recommendation. Mr.
Chellgren moved the adoption of FCR 6. The motion, seconded by Dr. Mather, passed. (See
FCR 6 at the end of the Minutes.)

Dr. Meriwether commented that the University moved to provide a for-profit institution
to buy and/or manage practices. He explained that managed care has taken a different turn and
the expected capitation is not taking place and the University has withdrawn from a lot of those
areas. He continued by stating that medicine is a business to a certain degree and there's
marketing in every business. He noted that we currently have primary care physicians and
referring physicians in the community that we can offer services to; and these aren't necessarily
black bottom line services that we offer to them, yet they yield a very substantial black bottom
line from the stand point of our Medical Center as compared to some of the others in the country.
He stated that this is a very conservative figure and the Hospital Board will come back to the
Board of Trustees with other marketing ideas with ways to spend money to make money. He
noted that it will seem to be a loss on the front end, but when you start to take into account the
number of tests, the number of services and the feedback that one gets from patients being sent
into the university, then whatever red we have turns to black pretty quick. He commended Frank
Butler and Dr. Holsinger on their superb job of managing the facility.

Mr. Williams asked what the totals expenditures are to date. Mr. Butler replied that they
are currently at $24.2 million.

Dr. Meriwether stated that the University of Kentucky has been a participant in CHA for
quite some time; however, CHA had to stand up in front of some of these businesses and take a
hit for a while on the losses that CHA had. He noted that we are now in the black with CHA and
actually making money there. He explained that CHA is a for-profit, insurance company and it's
an example of how you get something back from this. He concluded by stating that sometimes it
doesn't come in the first year.

0. Consent Agenda (FCR 7-25)
Mr. Chellgren stated that the following items would be voted upon as a consent agenda:

FCR 7 - an anonymous gift of $200,000 and pledge of $800,000 for the William T.
Young Library Endowment to support the library collection for t