Meeting No. 1,124 THE MINUTES OF THE BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM Pages 1 - 216 August 20-21, 2014 Austin, Texas TABLE OF CONTENTS THE MINUTES OF THE BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM AUGUST 20-21, 2014 AUSTIN, TEXAS MEETING NO. 1,124 Page No. August 20, 2014 I. CONVENE THE BOARD IN OPEN SESSION 1 II. ATTENDANCE 1 III. AGENDA ITEMS 1 1. U. T. System Board of Regents: Annual Meeting with Officers of the U. T. System Faculty Advisory Council 1 2. U. T. System: Announcement of academic and health institution recipients of the 2014 Regents’ Outstanding Teaching Awards, remarks by representative faculty, and announcement of new members of The University of Texas Kenneth I. Shine, M.D., Academy of Health Science Education 2 IV. RECESS 2 August 21, 2014 V. ATTENDANCE 3 VI. AGENDA ITEMS 3 3. U. T. System Board of Regents: Approval of Consent Agenda items 3 4. U. T. System Board of Regents: Presentation of Certificate of Appreciation to U. T. Brownsville President García 4 5. U. T. System Board of Regents: Presentation of Certificate of Appreciation to U. T. Pan American President Nelsen 5 6. U. T. Austin: Introduction of S. Claiborne “Clay” Johnston, M.D., Ph.D., founding Dean of the Dean Medical School 6 i 7. U. T. System Board of Regents: Approval to implement recommendations from the Task Force on Employee/ Student Relationships, including revision to Regents’ Rules and Regulations, Rule 30105 (Sexual Harassment and Misconduct and Inappropriate Consensual Relationships) 6 8. U. T. System: Approval of $10 million from the Permanent University Fund and from Available University Funds to create the U. T. System Neuroscience and Neurotechnology Institute for Fiscal Year 2015 and $10 million for Fiscal Year 2016 9 9. U. T. System: Acceptance of recommendations from the Task Force on Student Mental Health and Safety; approval to fund after-hours crisis counseling services for five years and implementation of a Systemwide bystander intervention program for three years; and allocation of $2,552,268 of Available University Funds to U. T. Austin to operate both programs 10 10. U. T. System: Approval of recommended priorities identified by the Implementation Committee of the Task Force on Engineering Education for Texas in the 21st Century 32 11. U. T. System: Approval of $2 million from Available University Funds to create the U .T. System Texas Energy Research, Engineering, and Education Institute (EREEI) and $10 million per year for two years in Permanent University Funds for Science and Technology Acquisition and Retention (STARs) funding to support the engineering initiative 33 12. U. T. System: Approval of $800,000 from Available University Funds for expansion of services provided by the Office of External Relations’ Center for Enhancing Philanthropy and introduction of new services to U. T. System institutions to enhance philanthropy 34 13. U. T. System: Report on activities of the Institute for Transformational Learning 36 14. U. T. System Board of Regents: Appointment of Charles A. LeMaistre, M.D., as Chancellor Emeritus 36 15. U. T. System Board of Regents: Appointment of Hans M. Mark, Ph.D., as Chancellor Emeritus 37 ii VII. STANDING COMMITTEE REPORTS TO THE BOARD 38 A. REPORT AND RECOMMENDATION OF THE AUDIT, COMPLIANCE, AND MANAGEMENT REVIEW COMMITTEE 39 1. U. T. System Board of Regents: Discussion and appropriate action regarding Consent Agenda items, if any, referred for Committee consideration 39 2. U. T. System: Discussion regarding restructuring of the internal audit functions at emerging research institutions (Committee Meeting Only) 39 3. U. T. System: Report on the Systemwide internal audit activities, including an update on Institutional Audit Committee governance (Committee Meeting Only) 39 4. U. T. System: Approval of the U. T. Systemwide Annual Internal Audit Plan for Fiscal Year 2015 39 5. U. T. System: Approval of non-audit services to be performed by U. T. System’s external audit firm, Deloitte & Touche LLP, for U. T. Medical Branch - Galveston (for the Physician Data Integration project) and the U. T. System Office of Technology Commercialization (for a royalty license compliance review) 40 B. REPORT AND RECOMMENDATIONS OF THE FINANCE AND PLANNING COMMITTEE 41 1. U. T. System Board of Regents: Discussion and appropriate action regarding Consent Agenda items, if any, referred for Committee consideration 41 2. U. T. System: Key Financial Indicators Report and Monthly Financial Report (Committee Meeting Only) 41 3. U. T. System Board of Regents: The University of Texas Investment Management Company (UTIMCO) Performance Summary Report and Investment Reports for the quarter ended May 31, 2014 41 iii 4. U. T. System Board of Regents: Approval of amendments to the Investment Policy Statements for the Permanent University Fund, the General Endowment Fund, the Permanent Health Fund, the Long Term Fund, the Intermediate Term Fund, the Liquidity Policy, and the Derivative Investment Policy 48 5. U. T. System Board of Regents: Approval of the Annual Budget for FY 2015, including the capital expenditures budget and other external direct charges to the Funds, and the Annual Fee and Allocation Schedule for The University of Texas Investment Management Company (UTIMCO) 67 6. U. T. System Board of Regents: Adoption of a Resolution authorizing the issuance, sale, and delivery of Permanent University Fund Bonds and authorization to complete all related transactions 70 7. U. T. System Board of Regents: Adoption of a Supplemental Resolution authorizing the issuance, sale, and delivery of Revenue Financing System Bonds and authorization to complete all related transactions 71 8. U. T. System Board of Regents: Adoption of resolutions authorizing certain bond enhancement agreements for Revenue Financing System debt and Permanent University Fund debt, including ratification of U. T. System Interest Rate Swap Policy 72 9. U. T. System Board of Regents: Approval of aggregate amount of $171,570,000 of equipment financing for Fiscal Year 2015 and resolution regarding parity debt 96 C. REPORT AND RECOMMENDATIONS OF THE ACADEMIC AFFAIRS COMMITTEE 98 1. U. T. System Board of Regents: Discussion and appropriate action regarding Consent Agenda items, if any, referred for Committee consideration 98 2. U. T. San Antonio: Amendment to the Regents’ Rules and Regulations, Rule 40601, Section 1.11(a), concerning name change of the College of Architecture to the College of Architecture, Construction and Planning 98 iv 3. U. T. Tyler: Amendment of the Regents’ Rules and Regulations, Rule 40601, Section 1.12(d), concerning name change of the College of Engineering and Computer Science to the College of Engineering 99 4. U. T. San Antonio: Approval of honorific naming of the San Saba Residence Hall for Mr. and Mrs. Carlos Alvarez as the Malu and Carlos Alvarez Residence Hall 100 5. U. T. Austin: Approval of preliminary authority for a Doctor of Nursing Practice Program 101 6. U. T. Permian Basin: Approval of preliminary authority for a Doctor of Education in Educational Leadership 102 7. U. T. Rio Grande Valley: Approval to establish an academic structure for U. T. Rio Grande Valley 103 8. U. T. System: Discussion of Student Lifecycle Management: Improving student learning and outcomes (Committee Meeting Only) 106 D. REPORT AND RECOMMENDATION OF THE HEALTH AFFAIRS COMMITTEE 107 1. U. T. System Board of Regents: Discussion and appropriate action regarding Consent Agenda items, if any, referred for Committee consideration 107 2. U. T. System: Approval to distribute a portion of The University of Texas System Professional Medical Liability Benefit Plan premium returns and approve rates for the Plan 107 3. U. T. Southwestern Medical Center: Report on the William P. Clements, Jr. University Hospital (Committee Meeting Only) 110 4. U. T. System: Discussion and possible appropriate action regarding development of proposal to improve care of patients with diabetes through improved data collection, management, analysis, and application (Committee Meeting Only) 110 v E. REPORT AND RECOMMENDATIONS OF THE FACILITIES PLANNING AND CONSTRUCTION COMMITTEE 111 1. U. T. System Board of Regents: Discussion and appropriate action regarding Consent Agenda items, if any, referred for Committee consideration 111 2. U. T. System: Progress report of the Task Force on Facility Planning for the 21st Century (Committee Meeting Only) 111 3. U. T. Austin: Jackson Geological Sciences Building HVAC and Electrical Renovation - Amendment of the FY 2015-2020 Capital Improvement Program to include project; approval of total project cost; appropriation of funds; and authorization of institutional management (Final Board approval) 111 4. U. T. Austin: Medical District Utility System Infrastructure - Approval of design development; appropriation and authorization of expenditure of funds; and resolution regarding parity debt (Final Board approval) 112 5. U. T. Dallas: Callier Richardson Expansion - Amendment of the FY 2015-2020 Capital Improvement Program to revise funding sources; approval of design development; appropriation of funds and authorization of expenditure; and resolution regarding parity debt (Final Board approval) 113 6. U. T. Tyler: Music Building Addition - Approval of design development; and appropriation of funds and authorization of expenditure (Final Board approval) 115 7. U. T. System: U. T. System Administration Replacement Office Building - Amendment of the FY 2015-2020 Capital Improvement Program to increase total project cost;