MINUTES OF THE MEETING
UNIVERSITY OF HOUSTON SYSTEM
BOARD OF REGENTS MEETING
February 5, 2008
| Members Present: | Members Absent: |
| Welcome W. Wilson, Chair Calvin W. Stephens, Vice Chair Jim P. Wise, Secretary Michael J. Cemo Dennis D. Golden Raul A. Gonzalez Leroy L. Hermes Morgan Dunn O’Connor Lynden B. Rose Nelda Luce Blair Jacob Monty Mica Mosbacher Carroll Robertson Ray |
Christopher Sharpe |
The University of Houston System Board of Regents convened in the Melcher Board Room 100B, Athletics/Alumni Building, 3100 Cullen Boulevard, University of Houston on Tuesday, February 5, 2008. Noting the presence of a quorum, Chairman Wilson called the meeting to order at 8:31 a.m.
Chairman Wilson turned the meeting over to Chancellor Khator, who introduced Dr. Stephen Portch, Chancellor Emeritus of the University System of Georgia; a former Distinguished Senior Fellow for the Education Commission of the States; and national consultant and speaker. Dr. Portch, with the Pappas Consulting Group, Inc., will work with the UH System to analyze, assess, and make suggestions for a new strategic plan.
Dr. Portch gave brief remarks stating that over the next several months he would be working with the UH System and the University of Houston, interviewing Board members, vice chancellors, faculty leaders, senior administrators, staff members, and key stakeholders, collecting information. Once this information is gathered and reviewed, Dr. Portch and the Pappas Consulting Group will make recommendations to the Chancellor and the Board of Regents for a new strategic plan to achieve success.
Chairman Wilson stated that the agenda would be taken out of order and stated the first item would be the Executive Session. 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 8:38 a.m.
EXECUTIVE SESSION REPORT
Chairman Wilson reconvened the Board meeting at 9:15 a.m. and stated the regents heard a brief report from Mr. Dave Maggard. There was no action taken as a result of Executive Session.
There being no further business, the board recessed for the meetings of the standing committees at 9:15 a.m. Chairman Wilson turned the meeting over to Regent O’Connor for the External Affairs Committee Meeting.
EXTERNAL AFFAIRS COMMITTEE MEETING
Regent Morgan O’Connor called the meeting to order at 9:15 a.m. and turned the meeting over to Mr. Grover Campbell, who gave an update on the item presented. This item was for information only and required no action by the board.
- Update on State and Federal Agenda – UH System
There being no further business to come before the committee, the meeting adjourned at 9:38 a.m.
ADMINISTRATION AND FINANCE COMMITTEE MEETING
Regent Lynden Rose called the meeting to order at 9:39 a.m. and turned the meeting over to Mr. Jim McShan.
Mr. McShan presented the following four items for review by the committee:
Action:
- Appointment of Global Custodian – UH System
Approval was requested to award a five year contract to Mellon Trust of New England, N.A. (a subsidiary of The Bank of New York Mellon) to replace JP Morgan Chase as the global custodian for the UH System’s endowed and non-endowed assets. An RFP to serve as the System’s custodian to 10 firms and the posting of the RFP on the Texas Building and Procurement Commission’s website was distributed in June 2007. There were four proposals received which were evaluated by System staff using criteria to determine the ability of each firm to fulfill the System’s current and future needs, its level of customer service as measured by client references, and the cost of services. Our investment consultant, Bruce Myers of Cambridge Associates, also participated in the interview process. It was the consensus of the System staff and Cambridge Associates that Mellon be awarded the contract based on the overall value of Mellon’s proposal including qualifications, price, and client references; and the service team proposed by Mellon, and the fact that the relationship manager is located in Texas, and the demonstrated capabilities of Mellon throughout the process including the final presentation.
The annual cost is estimated at $160,245, which represents an $18,000 savings per year. The total cost of the contract over a five-year period is estimated at $801,225.
- Appointment of Financial Institution for Banking Services – UH System
Approval was requested to award a five-year contract to Bank of America as the System’s provider of banking services. An RFP to serve as the System’s provider of banking services to nine banks and the posting of the RFP on the Texas Building and Procurement Commission’s website was distributed in June 2007. System staff evaluated the nine proposals received using criteria to determine the ability of each firm to fulfill the System’s current and future needs and the cost of services. Bank of America was recommended as the provider of banking services based on the overall value of Bank of America’s proposal taking into consideration many factors including qualifications, price and the service team proposed by Bank of America. Bank of America’s pricing was the lowest compared to the other finalists, and their products, technology and services are considered among the best along with the other leading banks in our market.
The annual cost is estimated at $1,152,000, which represents a $542,000 (32%) savings per year. Total cost of the contract over a five-year period is estimated at $5,760,000.
- Build Out of the Science and Engineering Research Center Laboratory Building – University of Houston
Mr. McShan turned the meeting over to Mr. Dave Irvin, who gave a brief powerpoint presentation. A copy of this presentation is on file in the Board office.
Approval was requested to construct and furnish the laboratories in the Science and Engineering Research Center Laboratory (157,000 gsf), which was completed to the shell stage in March 2006. The savings realized in the shell construction allowed the lab utilities infrastructure and some lab build out to occur. The $4.4 million savings were used to build out the research tower offices, hallways, elevator lobbies for floors 2-5, infrastructure and utility vertical and main horizontal trunk lines, Clean Rooms (Class 100-1000), security/camera system, bridge walkway connecting to SRI, new exterior lighting and landscaping throughout the western portion of campus, expanded sidewalks, revised the traffic lights, and buried overhead utility lines at Holman and Cullen.
The levels will be built out in two or more phases. The Source of Funds: $12,000,000 from the Higher Education Assistance Funds.
- Consolidated Revenue and Refunding Bonds, Series 2008: Bond Resolution; Preliminary Official Statement; Bond Purchase Agreement; and Reimbursement Resolution – UH System
Mr. McShan presented this item. Approval was requested to authorize the System to issue consolidated revenue bonds to be sold by negotiated sale for combined new money and refunding purposes. The refunding portion of this bond issue represents the use of a portion of the proceeds to payoff any commercial paper notes that may be issued under our existing commercial paper program and to refund a portion of the Consolidated Revenue Bonds, Series 1999 and 2002A. The Master Resolution for the consolidated revenue bonds was approved by the Board of Regents on April 25, 1990. The Eighteenth Supplemental Resolution appoints the Chair of the Administration and Finance Committee as pricing officer for the bonds and delegates to the pricing officer the authority to sell the Series 2008 bonds for new money and refunding purposes. Preparation of the definitive Official Statement will be subject to such additional changes as may be approved by the Vice Chancellor for Administration and Finance or the Treasurer, as designated financial officers for the bonds, who shall be authorized to take such other administrative actions as shall be necessary to prepare for the sale of these bonds. The Reimbursement Resolution provides that certain expenses incurred, or to be incurred, for the System are deemed to be incurred in anticipation of future issuance of consolidated revenue bonds, and shall be reimbursed from the proceeds of such bonds. Board approval was requested for the Eighteenth Supplemental Resolution, the Preliminary Official Statement, the Bond Purchase Agreement, and the Reimbursement Resolution.
Regent Stephens moved approval of the four action item as presented. Regent Hermes seconded the motion, which passed unanimously. The committee will present these items for final board approval at the February 21, 2008 Board meeting.
Mr. McShan presented the following item for information:
- FY07 Annual Financial Statement – UH System
Mr. McShan turned the meeting over to Mr. David Ellis, who gave an overview of the FY07 Annual Financial Report.
This item was for information only and required no action by the board. A copy of the financial reports is on file in the Board office.
There being no further business to come before the committee, the meeting adjourned at 10:11 a.m.
UNIVERSITY ADVANCEMENT COMMITTEE MEETING
Regent Golden called the meeting to order at 10:11 a.m. and turned the meeting over to Mr. Rierson.
- Overview of Private Support and University Relations Presentation –
UH System
Mr. Rierson gave a brief report summarizing private support results for FY 2007-2008 through December 2007. He then turned the meeting over to Ms. Karen Clarke, who gave a presentation on the Media Relations Success and the 100 day plan. A copy of Ms. Clarke’s presentation is on file in the board office.
This item was for information only and required no action by the board.
There being no further business to come before the committee, the meeting adjourned at 10:38 a.m.
AUDIT COMMITTEE MEETING
Regent Stephens called the meeting to order at 10:38 a.m. and turned the meeting over to Mr. Don Guyton.
Mr. Guyton stated there were two open points from the last Audit Committee meeting: (1) provide an update on the status of the receipt of HAF’s financial statements and tax return; and (2) an explanation of the board of regents’ responsibilities with respect to KUHF and KUHT and the UH Charter School.
Mr. Guyton presented the action item on the agenda requiring committee and board approval today:
Action:
- Review and Approval of Audit Report and Financial Statements, University of Houston Charter School, FY 2007 – University of Houston
Mr. Guyton stated committee and board approval were requested for the certification of the audit and financial information by the board required by the Texas Education Code, Title 2, Chapter 44, Section 44.008(d). Board approval was sought so the University of Houston could expedite the submission to the TEA.
Regent O’Connor moved committee approval of the action item as presented. Regent Hermes seconded the motion, which passed unanimously. Regent Cemo moved board approval of the item as presented. Regent Gonzalez seconded the motion, which passed unanimously.
Mr. Guyton then presented the five information items on the agenda.
- Board of Regents’ Internal Audit and Institutional Compliance Policies –
UH System
Item # 3.03 on the Audit Committee Planner requires an annual review of the Board of Regents’ policies on Internal Audit and Institutional Compliance. Mr. Guyton had no suggestions for modifications to these policies.
- Certification of Annual Financial Statements – UH System
Item # 3.13 on the Audit Committee Planner requires the UH System Chancellor and UH System Chief Financial Officer to certify the annual financial statements for the UH System as a whole, and each component President and Chief Financial Officer certify the annual financial statements for their respective component institutions. Financial Statements Certification Letters for FY2007 were completed for all components.
- Internal Audit Report – Briefing Booklet – UH System
Mr. Guyton stated that six internal audit reports were prepared since the November Audit Committee Meeting. These reports addressed areas included in the Board-approved Audit Plan for FY years 2007 and 2008 and included the annual football attendance audit which is mandated by NCAA regulation, the Wortham House Fixed Assets Inventory, the UH PeopleSoft Student, and Academic Administration System Data Conversion, Scholarship Programs at UH-Clear Lake and UH-Downtown and follow-up activity. These reports will be submitted to the Governor’s Office of Budget and Planning, the Legislative Budget Board, the Sunset Advisory Committee, and the State Auditor, as required by the Texas Government Code.
The Audit report also addressed the status of 21 action items in 15 individual audit reports. Internal Audit verified that 15 of the action items had been implemented and six partially implemented. Updated management responses were obtained on the partially implemented actions. Two high risk items in the report were successfully implemented.
Mr. Guyton also mentioned that there were various Special Projects in Progress. The State Auditor’s Office is currently conducting their fieldwork for the annual state-wide audit for FY2007. This review includes UH, UHD and UHV Federal Financial Aid programs and their follow-up procedures on the prior year audit for UH, UHD and UHCL.
- Institutional Compliance Activity Report for the Three Months Ended December 31, 2007 – UH System
Mr. Guyton stated that this report listed institutional compliance for the past three months. These activities included risk assessments, compliance audits, compliance committee meetings, risk mitigation and hotline reports.
Mr. Guyton mentioned that the biggest elements of risk mitigation were our training programs for faculty and staff. There are five State and Systemwide- mandated training/reporting requirements that all employees must fulfill on an annual or bi-annual basis and these courses are now available to all employees in an online format 24 hours a day, seven days a week.
State-mandated training consist of:
- Equal Employment Opportunity (EEO) – bi-annually required by the Texas Labor Code; and
- Secure Our Systems – annually required by the Texas Administrative Code, Chapter 202.
Systemwide Annual Training/Reporting Requirements are:
- Code of Ethics – annually as part of the UH System fraud prevention plan;
- Fraud Awareness – annually as part of the UH System fraud prevention plan; and
- External Consulting & Related Party Disclosure required by the Board Code of Ethics Policy 57.02 and disclosure of related party interests required by System Administrative Memorandum 03.A.17.
The Conflicts of Interest form by the Board was discussed. At the present time, board members are not required to sign this form. Regent Stephens stated that this topic would be brought back to the board for further discussion at a later date.
5. External Audit Reports – UH System
- UH Athletics Department Independent Accountants’ Report on the Application of Agreed-Upon procedures for Year Ended August 31, 2007 (excerpts)
Item #13, on the Audit Committee Charter and Checklist required the committee to review any significant findings and recommendations of the State Auditor and any employed public accounting firm.
These 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 11:00 a.m.
ACADEMIC AND STUDENT AFFAIRS COMMITTEE MEETING
Regent Gonzalez called the meeting to order at 11:00 a.m. and turned the meeting over to Dr. Don Foss
1. Tier 1 Research – Arts and Human Enrichment – University of Houston
Dr. Foss introduced the item and then turned the meeting over to Dr. Donald Birx, who gave a presentation to the board on Tier 1 Research. Dr. Birx gave an overview of the UH research clusters: Arts & Human Enrichment; Bio-Med Sciences & Engineering; Community Advancement & Education; Complex Systems/Space Exploration; Energy & Natural Resources; and Nano-Materials. After his presentation, Dr. Birx turned the meeting over to Dr. John Antel, Dean of the College of Liberal Arts and Social Sciences.
Dean Antel stated the research vision is to expand on the concept of research clusters. He then introduced Dr. Tony Hoagland, who read the following poem titled “Romanesque Arches” by the Swedish poet Thomas Transtromer.
Dean Antel then introduced Dr. David A.White, Director of the Moores School of Music and Professor of composition and music theory. Dr. White distributed a CD titled “Praise the Spirit”. A copy of this recording is on file in the board office.
- Voluntary System of Accountability – UH System
Dr. Foss presented an overview of the Voluntary System of Accountability, which is a new initiative in which the four UH System universities are participating. Dr. Foss stated there were multiple assessments at multiple levels: University level, State of Texas, National level, National level by discipline or profession, AASCU and NASULGC.
Dr. Foss stated the goals were to:
- Provide consistent, comparable, transparent information for higher education stakeholders;
- Aid students and families in college choice process; and
- Demonstrate greater institutional accountability for student learning and development.
Dr. Foss also mentioned that the University of Houston is committed to participate in the national assessment process and the goal is continuous improvement.
A copy of Dr. Foss’s presentation is on file in the board office.
These 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 11:30 a.m.
Chairman Wilson reconvened to a full board meeting and moved to the next item on the agenda, the Introduction and Swearing-in of New Regents.
Chairman Wilson asked everyone to move to the John O’Quinn Great Hall for this event.
The following new regents were sworn-in and each of them gave brief remarks:
- Carroll Robertson Ray – replaced Regent Morgan Dunn O’Connor. She was sworn-in by Judge Reece Rondon, 234th Civil Court, Harris County. Her term expires on August 31, 2011.
- Nelda Luce Blair – replaced Regent Michael J. Cemo. She was sworn-in by Judge Fred Edwards, 9th District Court, Montgomery County. Her term expires on August 31, 2013.
- Michele “Mica” Mosbacher – replaced Regent Raul A. Gonzalez. She was sworn-in by Judge Reece Rondon. Her term expires on August 31, 2013.
- Jacob Monty – replaced Regent Leroy L. Hermes. He was also sworn-in by
Judge Reece Rondon. His term expires on August 31, 2013.
A brief reception followed the ceremony, where family and friends gathered to celebrate the occasion.
At 12:50 p.m., Chairman Wilson asked the current board members to move back to the Melcher Board Room 100B to continue the board meeting.
The last item on the agenda was the Chair’s Report. Chairman Wilson took this opportunity to thank the four outgoing regents: Morgan Dunn O’Connor,
Leroy L. Hermes, Michael J. Cemo, and Raul A. Gonzalez, for their tenure on the board, their leadership and support, their professionalism, and devoted service to the University of Houston System. On behalf of the board and the University of Houston System, Chairman Wilson presented each outgoing regent a Board Resolution for their outstanding service.
There being no further business to come before the Board, the meeting adjourned at 1:20 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:
| Renu Khator Donald Foss Jim McShan Dona Cornell Mike Rierson Grover Campbell Elwyn Lee Donald Birx Dan Gardner Max Castillo Tim Hudson William Staples Dave Maggard James McDow |
Raymond Bartlett Ed Apodaca Wynne Chin Jose´ Rangel Malcolm Davis John Antel James Anderson Gregg Roman Molly Woods David Ellis Karen Clarke Stephen Portch Ed Jones Marquette Hobbs |
John Powell Oscar Gutierrez Drew Masterson Russ Hoskins David A. White Tony Hoagland Lisa Merkel Ed Hugetz John Robinson Don Guyton David Bell Dave Irvin Janis Newman Gerry Mathisen |
