Minutes of the Meeting of the Board of Trustees University of Kentucky Tuesday, May 1, 2018 The Board of Trustees of the University of Kentucky met on Tuesday, May 1, 2018, in Woodward Hall in the Gatton College of Business and Economics. A. Meeting Opened E. Britt Brockman, Chair of the Board of Trustees, called the meeting to order at 1:00 p.m. Chair Brockman asked Trustee Kelly Holland, 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: Jennifer Y. Barber, Claude A. “Skip” Berry, III, Lee X. Blonder, James H. Booth, E. Britt Brockman, Mark P. Bryant, Benjamin Childress, Michael A. Christian, Angela L. Edwards, Cammie DeShields Grant, Robert Grossman, David V. Hawpe, Kelly Sullivan Holland, Elizabeth McCoy, David Melanson, Derrick K. Ramsey, C. Frank Shoop, Sandra R. Shuffett, Robert Vance, and Barbara Young. Trustee Carol Martin “Bill” Gatton was not in attendance. Secretary Holland announced a quorum was present. The University administration was represented by President Eli Capilouto, Provost Dave Blackwell, Executive Vice President for Health Affairs Mark F. Newman, Executive Vice President for Finance and Administration Eric Monday, Vice President for University Relations Tom Harris, Vice President for Research Lisa Cassis, Chief of Staff Bill Swinford, and Vice President for Institutional Diversity Sonja Feist-Price. The University faculty was represented by Chair of the University Senate Council Katherine McCormick, and the University staff was represented by Chair of the Staff Senate Jon Gent. Guests and members of the news media were also in attendance. C. Chairs Report Chair Brockman reported that there had been no petitions to address the Board since the last Board of Trustees meeting. There was one request from a student group to appear before the Investment Committee, which Committee Chair Bryant accommodated. Chair Brockman continued by announcing three Board members had recently been confirmed by the Governor’s Office. Senate Resolution 335 confirming Trustee Ramsey, Senate Resolution 337 confirming Trustee Shuffett, and Senate Resolution 344 confirming Trustee McCoy. The Board congratulated the newly confirmed Trustees with a round of applause. Chair Brockman called attention to the 18 consent items on the agenda. The items were as follows: Minutes Board of Trustees Meeting, February 23, 2018 PR 2 Personnel Actions ASACR 1 Candidate for Degree: December 2017 ASACR 2 Candidates for Degrees: May 2018 ASACR 3 Candidates for Degrees: August 2018 ASACR 4 Candidates for In Memoriam Degrees: May 2018 ASACR 5 Academic Degree Recommendation: College of Fine Arts ASACR 6 Academic Degree Recommendation: College of Design ASACR 7 Academic Degree Recommendation: College of Arts and Sciences ASACR 8 Academic Degree Recommendation: College of Education ASACR 9 Academic Degree Recommendation: College of Agriculture, Food, and Environment ASACR 10 Establishment of the Center for Health Equity Transformation: College of Medicine FCR 1 Approval of Internal Loan for Upgrade/Renovate/Expand Grain Center of Excellence Capital Project FCR 2 Acceptance of Gift and Pledge from the Kentucky Farm Bureau Federation FCR 3 Renovate/Upgrade Existing Housing (Delta Delta Delta Fraternity) FCR 4 Acceptance of Interim Financial Report for the Six Months ended December 31, 2017 FCR 5 2017-2018 Budget Revisions FCR 6 Decommission Facilities: Bowman’s Den Hearing no requests to remove items from the consent agenda, Chair Brockman asked for a motion for approval. Trustee Christian moved approval of the consent agenda. Trustee Melanson seconded the motion and the consent agenda passed without dissent. (See consent items on the Board of Trustees website, www.uky.edu/Trustees, under agenda.) Chair Brockman recognized Trustee Childress who introduced the new Student Government (SGA) President, Michael Hamilton. Trustee Childress encouraged the Board to meet President Hamilton after the meeting and expressed his enthusiasm for the newly appointed President and his team. The Board congratulated President Hamilton with a round of applause. Chair Brockman continued by introducing President Capilouto for his report. D. President’s Report (PR 1) The President began by recognizing the grand opening of the new Student Center. “It was a special moment in our institution’s history as we acknowledged the support of University friends and the importance of building community on our campus. This afternoon, in PR4, you will consider a proposal to name the new Student Center in honor of life-long Wildcat, Trustee Emeritus, and the University’s single-largest philanthropist, - 2 - Mr. Bill Gatton. His $20 million contribution to the Student Center will save today’s students, and those yet to come, an average of $50 per student, per year, in perpetuity.” The President continued by highlighting the 5,300 Wildcats the Board conferred degrees upon. “They came to our campus four years ago from big cities and rural hamlets across our state, country, and world. They came to UK with a diverse array of lived experiences, cultural and ethnic foundations, and preconceived notions about the world and their place in it. This afternoon, I’m proud to share four of their stories in a compelling video produced by UK’s Public Relations and Marketing team. (See video link, https://youtu.be/5bZ60Q2Xz5I) I think you will agree that Commencement weekend is a special weekend for our students, their families, as well as our faculty and staff.” The President continued by discussing the state budget and the University’s approach as partners and collaborators with Kentucky’s lawmakers. “Policymakers know we are advocating honestly and respectfully for investments in this place, instead of trading headlines.” The President highlighted the initial proposed 6.25 percent reduction in UK’s base appropriation, which when added to reductions to mandated and pass-through programs, totaled more than $31 million. At the conclusion of the process, the 6.25 percent cut was enacted in the first year of the biennium. The President pointed out, $31 million of the $54.3 million in funds that were cut were placed in a performance pool for Fiscal Year 2019 and will be distributed based on the model passed by the General Assembly last year. The President stated, “We can anticipate earning enough funds through that model that our reduction will ultimately be closer to three percent rather than 6.25 percent.” The President continued, “We also recouped funding for important mandated programs, such as Agriculture Public Service, the Center for Applied Energy Research, the Center for Entrepreneurship, Livestock Diagnostic Laboratory, Mining Engineering Scholarships, and the Robinson Scholars program in the first year of the biennium. These are important programs that support students, faculty, and the people of Kentucky. Unfortunately, though, not all programs were restored. The University Press’ state support was eliminated, although we were able to remove language that would have prevented us to work with our partners to find a new path forward for the Press. Already, Provost Blackwell and Interim Dean of Libraries Dr. Deirdre Scaggs are reviewing where we are; they are talking with university partners across the state about how we ensure the long-term viability of the Press.” The President highlighted many of UK’s pass-through programs that were proposed for elimination in the Governor’s budget and were not restored during the legislative process. Pointing out the Kentucky Transportation Center and Collaborative Center for Literacy Development were fully restored, funds for the Ovarian Cancer Screening were partially restored, and the Pediatric Cancer Research Trust Fund was created. The President continued by highlighting capital construction requests that were not in the Governor’s original budget proposal but ultimately were restored in the final budget. The asset preservation pool, a pool of funds UK would match to renovate the campus core, was included in the Governor’s proposal but ultimately eliminated in the legislative process. - 3 - The final budget includes $20 million of state bonds in each of the next two years to address health disparities in Kentucky. “Specifically, we will utilize this support for the continued fit-out of floors in the new research facility, Research Building 2 (RB2), scheduled to open later this summer. This investment comes at an important moment when both the state and the federal government are making critical investments in addressing health disparities. It also signals an overwhelming belief in this place to confront and answer these complex challenges. National Institutes of Health (NIH) funding will increase by more than $3 billion in the coming year; some $500 million of that is being targeted specifically at addressing opioid abuse and misuse. UK stands at the center of these efforts, poised to be a national leader in combating the more pernicious challenges confronting this country and our Commonwealth.” The President introduced Provost Blackwell and Executive Vice President Monday to come forward and give an update on our financial future with the added context of the state budget. Dr. Monday began by updating the Board on the Five-Year Financial Plan and the assumptions UK will need to achieve this goal. Assumptions include: no tuition and fee increases; 4,900 first-time freshman cohorts; 2.9 percent reduction in state appropriations for FY 2019; a 3.0 percent faculty and staff