UHS - Meeting Minutes

MINUTES
UNIVERSITY OF HOUSTON SYSTEM
BOARD OF REGENTS MEETING

November 15, 2007

Members Present:	Members Absent:
Welcome W. Wilson, Sr., Chair Michael J. Cemo Dennis D. Golden Raul A. Gonzalez Leroy L. Hermes Morgan Dunn O’Connor Lynden B. Rose Christopher Sharpe	Calvin W. Stephens, Vice Chair Jim P. Wise, Secretary

The University of Houston System Board of Regents convened in the Multi-Purpose Room, 3007 Ben Wilson, UH-Victoria, Victoria, Texas on Thursday, November 15, 2007. Noting the presence of a quorum, Chairman Wilson called the meeting to order at 10:06 a.m.

Chairman Wilson stated that Item C, the Chair’s Report, would be taken out of order and discussed later in the meeting.

The board recessed for the standing committees at 10:15 a.m. Chairman Wilson turned the meeting over to Regent Gonzalez for the Academic and Student Affairs Committee Report.

ACADEMIC AND STUDENT AFFAIRS COMMITTEE REPORT

Chairman Gonzalez reported that the Academic and Student Affairs Committee met on November 1, 2007 and approved the following items:

Bachelor of Science Degree in Biotechnology – University of Houston
Bachelor of Arts Degree in American Sign Language – University of Houston
Bachelor of Science Degree in Public Service Leadership – UH-Clear Lake
Personnel Action for an Executive Management Employee – University of Houston

Dr. Joseph W. Tedesco, new appointment as Dean, Cullen College of Engineering, effective January 1, 2008.

Chairman Gonzalez then turned the meeting over to Dr. Foss.

There was one Academic and Student Affairs action item on the agenda. Dr. Foss turned the meeting over to Dr. Birx, who presented this item, along with the information item, Research Strategy, Implementation and Status – UH System, into the presentation.

Action Item:

Establishment of a Non-Profit 501 © (3) Corporation – UH Center for Industrial Partnerships – UH System
Chapter 153 of the Texas Education Code was enacted specifically to allow universities an opportunity to create both non-credit and for profit corporations to allow more latitude in commercialization of university technologies. Having recently established the Center for Industrial Partnerships, creation of a non-profit 501 © (3) Corporation as an operating entity in the Center’s programs required Board of Regents approval.
This also enables UH to extend its research, technical assistance and outreach services to corporations, non-profit civic organizations, and U.S. Government classified research through flexible and productive partnerships.
Research Strategy, Implementation and Status – UH System
This item was also discussed by Dr. Birx in the above action item presented above and included the following items on Research: (1) UH System research synopsis for 2007; (2) Center for Industrial Partnerships (CIP) – Request for approval of 501 © (3) (CIP); Spinout companies; (3) Cluster status; (4) Research Office reorganization; (5) SERC Building progress; and (6) Challenges ahead.
A copy of this presentation is on file in the board office.

Regent O’Connor moved committee approval of the item as presented. Regent Gonzalez seconded the motion, which passed unanimously.

There was one additional information item on the agenda. Dr. Foss turned the meeting over to Dr. Hudson, who introduced Dr. Charles Bullock, Dean of the School of Business Administration, and Dr. Stephanie Solansky, Assistant Professor of Management, to present this item.

Texas Principal Excellence Program – UH-Victoria

There being no further business to come before the committee, the meeting adjourned at 10:55 a.m.

Regent Gonzalez moved Board approval of the items as presented. Regent Golden seconded the motion, which passed unanimously. Chairman Wilson then asked Regent Rose for the report of the Administration and Finance Committee (formerly Administration and Strategic Planning Committee).

ADMINISTRATION AND FINANCE COMMITTEE REPORT

Regent Rose reported that the Administration and Finance Committee (formerly the Administration and Strategic Planning Committee) met on November 1, 2007 and approved the following items:

UH System Debt Policy – UH System
UH System Master Swap Policy – UH System
Purchase Order for Public Broadcasting Service – University of Houston
Purchase Order for National Public Radio Service – University of Houston

There being no further business to come before the committee, the meeting adjourned at 10:56 a.m.

Regent Cemo moved Board approval of the items as presented. Regent O’Connor seconded the motion, which passed unanimously.

In the absence of the Audit Committee chair, Regent Stephens, Chairman Wilson turned the meeting over to Regent Golden for the report of the Audit Committee.

AUDIT COMMITTEE REPORT

Regent Golden stated that due to a lack of a quorum of the Audit Committee at the October 31, 2007 meeting, the items were deferred until the November 15, 2007 meeting. Regent Golden then turned the meeting over to Mr. Guyton, who presented the following items for information only.

Presentation – Anonymous Reporting Mechanism – UH System
Mr. Guyton gave a powerpoint presentation on “My Safe Campus Reporting System Demonstration”. The purpose of this presentation was to familiarize everyone with the anonymous reporting mechanism – My Safe Campus. A copy of this presentation is on file in the board office.
Audit Committee Charter and Checklist – UH System
These guidelines were recommended for the operation of the Audit Committee which are required by the Board of Regents Bylaw 4.6.1.b The Audit Committee Charter and Checklist, item number 26, requires an annual review and update. There were no changes to this document.
External Audit Reports – UH System
- Texas State Auditor’s Office – An Audit Report on Enrollment Reporting by Texas Public Universities, August 15, 2007
- University of Houston System Endowment Fund Financial Statements August 31, 2006 and 2005
- UH Athletics Department Independent Accountants’ Report on the Application of Agreed-Upon Procedures for Year ended August 31, 2006 (excerpts)
- Independent Accountants’ Recommendations on Internal Control Over Compliance with NCAA Guidelines for Reporting Athletic Revenues and Expenses Year ended August 31, 2006
Mr. Guyton stated that the first report on enrollment reporting by Texas Public Universities was conducted by the State Auditor’s Office (SAO) and included UH and UHCL. The SAO had no findings related to our institutions.

Mr. Guyton mentioned that the next report on the financial statements of the Endowment fund for FY2006 prepared by McConnell & Jones, the CPA firm engaged by the UH System, was a requirement imposed by a large gift several years ago from the Cullen Foundation.

The last two reports listed were excerpts from the agreed-upon procedures report for the UH Athletics Department for FY2006 and a document containing the auditor’s recommendation. These recommendations were tracked in the internal auditing follow-up database and they have been implemented.

Copies of the above documents are on file in the board office.
Internal Audit Report – Briefing Booklet – UH System
Mr. Guyton gave an overview of the contents included in this booklet which contains an Internal Audit Activity Outline and Internal Audit Reports issued since July 31, 2007, Audit Committee Meeting of the Board of Regents. These reports address areas included in the Board-approved audit plan for FY2007. They address the UH Athletics NCAA Rules Compliance Program, the annual non-compliance report, the Wortham House fixed assets inventory, the Houston Athletics Foundation, and Board of Regents and Chancellor/President Travel. These reports are submitted to the Governor’s Office of Budget and Planning, the Legislative Budget Board, the Sunset Advisory Committee and the SAO, as required by Texas Government Code. A copy of this report is on file in the board office.
Institutional Compliance Status Report for the Three Months Ended September 30, 2007 – UH System
This report summarized the information provided by each institution for their respective compliance functions. The activities included during this period were: risk assessments, compliance audits, compliance committee meetings, risk mitigation, and hot-line reports.
Ethics and Conflict of Interest Policies – UH System
Mr. Guyton stated that the Audit Committee Charter and Checklist requires an annual review of these policies. A copy of these policies is on file in the board office.
Annual Fraud Prevention and Awareness Report – UH System
This report requires the Audit Committee to evaluate management’s identification of fraud risks, the implementation of antifraud prevention and detection measures, and the creation of the appropriate “tone at the top” by reviewing an annual report which summarizes the fraud risk analyses and related risk mitigation strategies. Mr. Guyton stated this report was a compilation of each university’s comments on the status of their fraud prevention and awareness programs and had been completed using an online delivery mechanism for the third time. The Finance Department has also created a PeopleSoft query for departmental use to enable departments to monitor training progress for all of their employees.

All of the above items were for information only and required no action by the board.

There being no further business to come before the committee, the meeting adjourned at 11:37 a.m.

Chairman Wilson then asked Regent Cemo for the report of the Endowment Management Committee.

ENDOWMENT MANAGEMENT COMMITTEE REPORT

Regent Cemo reported that the Endowment Management Committee met on October 31, 2007. Due to a quorum of the board present, a board meeting was held. Regent Cemo stated Cambridge Associates gave an overview of the endowed and non-endowed funds at this meeting. Regent Cemo also stated that as a result of their report on the System’s non-endowed funds, the following action item would be presented and turned the meeting over to Mr. McShan, who presented this item.

Investment Policy for Non-Endowed Funds – UH System
The Endowment Management Committee requested approval to modify the investment policy to add additional language to Section II (Investment Objectives) and Section III (Investment Types) of the policy. Target allocation language was added to Section II, and item K was being added to Section III, which expanded the authorized investments to include an investment of up to 20% of the non-endowed funds in the UH System endowment fund. Other edits were noted, but most of them were either formatting changes or text inserted to provide clarity.

Regent Rose moved committee approval of the item as presented. Regent O’Connor seconded the motion, which passed unanimously.

Mr. McShan presented the next item on the agenda for information only.

Allocation of Non-Endowed Funds – UH System
Mr. McShan briefed the board on the reallocation of the non-endowed funds. He stated there were three tiers of liquidity: a cash pool, a liquidity pool, and a core pool. Based on a report from our investment consultant, Cambridge Associates, the committee approved a reallocation of the non-endowed funds into three tiers of liquidity to better reflect the actual liquidity requirements of these assets. Over time, this new allocation is expected to generate a real (net of inflation) return of 2.4% vs. the current expected return of 1.5%. This equates to an additional $2.4 million per year over the return of the non-endowed funds as currently invested. This tier structure is consistent with policies established by other Texas university systems.

There being no further business to come before the committee, the meeting adjourned at 11:44 a.m.

Regent Hermes moved Board approval of the action item as presented. Regent O’Connor seconded the motion, which passed unanimously.

Chairman Wilson turned the meeting over to Regent O’Connor for the report of the External Affairs Committee.

EXTERNAL AFFAIRS COMMITTEE REPORT

Regent O’Connor stated that the External Affairs Committee met on November 1, 2007. There were no items forwarded from that committee meeting and there were no new items to be presented.

There being no further business to come before the committee, the meeting adjourned at 11:45 a.m.

In the absence of the chair of the Strategic Planning Committee, Regent Wise, Chairman Wilson turned the meeting over to the vice chair, Regent Cemo, for the Strategic Planning Committee Report (new committee – formerly part of the Administration and Finance Committee).

STRATEGIC PLANNING COMMITTEE REPORT

Regent Cemo stated this was a new committee approved at the November 1, 2007 board meeting. The item presented for board approval was revised from the one formally presented at the Administration and Strategic Planning Committee meeting on November 1, 2007. Regent Cemo turned the meeting over to Mr. McShan, who presented the item for approval.

Purchase of Properties Along N. Main Street – UH System
Mr. McShan introduced the item and turned the meeting over to Mr. John Walsh, Director of Real Estate & Campus Planning, who gave an overview of the properties. Mr. Walsh stated that METRO would make available for purchase by the university four properties in the area, totaling 8.4 acres collectively. Appraisals on the five properties were conducted in September and October, based on a mutually agreed-upon set of assumptions. The agreement was that sellers must sell at the prices established through the appraisal process, with buyers having the option to buy. The assumption was that METRO would purchase the 4.7 acres needed for their project. The university is currently engaging in due diligence work to determine which, if any, of the METRO-owned properties it will seek to acquire. Delegation of authority was also requested for the Chancellor to execute contracts for the purchase of any or all of the four properties offered for sale by METRO.

There were no new items to be presented at the meeting today.

Regent Cemo moved committee approval of the item as presented. Regent Hermes seconded the motion, which passed unanimously.

There being no further business to come before the committee, the meeting adjourned at 12:08 a.m.

Regent Hermes moved Board approval of the action item as presented. Regent O’Connor seconded the motion, which passed unanimously.

Chairman Wilson turned the meeting over to Regent Golden, for the University Advancement Committee Report.

UNIVERSITY ADVANCEMENT COMMITTEE REPORT

Regent Golden stated the committee met on November 1, 2007, and there were no new items forwarded from that committee for approval and there were no new items to be presented today.

There being no further business to come before the committee, the meeting adjourned at 12:08 p.m.

After hearing all of the committee reports, Chairman Wilson reconvened to a full board meeting at 12:08 p.m.

CONSENT DOCKET

Chairman Wilson asked for approval of the Consent Docket. Regent Gonzalez moved approval of the items in the Consent Docket. Regent Hermes seconded the motion, which passed unanimously.

CHANCELLOR’S REPORT

Dr. Rudley discussed the Strategic Master Plan. He expressed the need to build a stronger relationship with the community colleges; increase enrollment; and work with the Governor’s office directly regarding Emergency Technology funds in order to attract funding.
He discussed the Health Science Initiative and the importance of moving forward with this project.
Dr. Rudley thanked the board for their support and confidence during his leadership these past six months while he served as Interim Chancellor/President for the UH System/University of Houston.

The next item on the agenda was A Presentation on the Fall Faculty Senate Retreat with Texas Legislatures given by UH Faculty Senate President, Dr. Joe Kotarba – University of Houston. Chairman Wilson turned the meeting over to Dr. Kotarba, who presented this item.

On October 26, 2007, Dr. Kotarba stated that the faculty senate held its fall retreat at the UH Hilton Hotel. The purpose of the retreat was to gather informally to discuss issues they ordinarily didn’t have an opportunity to address during their monthly meetings.

Several legislators were invited to the campus to discuss “The Texas Legislature and Higher Education.” Texas State Senator, District 7, Dan Patrick; Texas State Representative, District 147, Garnet Coleman; and Texas State Representative, District 137, Scott Hochberg attended the meeting. They all expressed a desire to see UH as a strong university.

They suggested several tasks would help to improve the university’s standing with the legislature. A few of them tasks mentioned: (1) get on the same page; (2) tell our story; (3) prioritize our projects; (4) communicate; and (5) motivate alumni.

Pursuant to Subchapter D of Chapter 551 of the Texas Government Code, which allows governing boards to meet in closed session, the Board of Regents went into Executive Session at 12:09 p.m. The board reconvened the meeting at 2:39 p.m.

EXECUTIVE SESSION REPORT

Chairman Wilson announced that the regents received a Litigation Status Report from General Counsel, Dona H. Cornell. Other items discussed by Interim Chancellor Rudley, Ms. Cornell and the board were property and personnel issues.

Chairman Wilson stated that no action was taken by the board at Executive Session.

CHAIR’S REPORT

As stated earlier, the Chair’s Report was taken out of order. Chairman Wilson discussed the following items:

The need for better advertising for the University of Houston; and
The necessity to organize a plan whereby we go into every district and work more closely with our legislators. Mr. Grover Campbell, VC/VP for Governmental Relations, will work with us on developing a strategy.

INFORMATION ONLY

Dr. Tim Hudson welcomed the board members to UH-Victoria. He introduced Ms. Deloris White, President of the Student Government Association, who gave brief remarks on the record enrollment at UH-Victoria and the numerous programs being offered at UH-Victoria.

Chairman Wilson mentioned that one individual had signed up for Open Forum to address the board at the meeting. Mr. Randy Faulk, President of the University System Staff Executive Council (USSEC), gave a brief summary statement on their organization.

In absence of further business, the Board adjourned at 2:43 p.m.

All documentation submitted to the Board in support of the foregoing action items, including but not limited to “Passed” agenda items and supporting documentation presented to the Board, is incorporated herein and made a part of these minutes for all purposes; however, this does not constitute a waiver of any privileges contained herein.

Others Present:
John M. Rudley Donald Foss Jim McShan Dona H. Cornell Michael Rierson Elwyn Lee Tim Hudson William Staples Max Castillo Grover Campbell Donald Birx Dick Phillips Stephanie Solansky Joe Kotarba	Don Guyton Dave Irvin Raymond Bartlett Sue Davis Joe Papick John Walsh Kelly Gill Jim Anderson Molly Woods David Bell Carl Stockton Lila Murray Margaret Rice Faye Landry	Wayne Beran David Bradley Randy Faulk Michelle Sabino Janis Newman Suzanne LaBrecque Ed Hugetz Charles Henry Deloris White Malcolm Davis Margaret Garcia Charles Bullock Kathy Walton Gerry Mathisen