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with reference to the sale of the $7,585,000 (plus or minus up to
$755,000) of University of Kentucky Consolidated Educational Buildings
Refunding Revenue Bonds, Series K (Second Series), dated June 1, 1993, at
a net interest cost of 5.30682; (ii) that the Board of Trustees approve
the form of Official Statement as prepared by J.J. B. Hilliard, W. L.
Lyons, Inc., the Financial Advisors to the Board of Trustees. His motion,
which was seconded by Mr. Wilcoxson, passed. (See FCR 15 at the end of
the Minutes.)

       FF.   Operating Budget for 1993-94 (FCR 8)

       In opening his presentation, President Wethington said that it had
been a difficult budget to put together. He noted that it represented a
lot of work by a lot of people in the University; faculty, staff and
others. He said that the development of the budget was significantly
influenced by continuing downward revisions in the state appropriations to
the University. He reported that the administration reexamined
priorities, took a critical look at operations during 1992-93, reviewed
the administrative structure, staffing patterns, and workload, and
developed a University System faculty workload policy which the University
had not had before. He reminded the Board of the comprehensive review of
the University Strategic Plan which was brought to the Board for approval
earlier in the year and reported that each of the major thrusts outlined
in the Plan had been addressed in the 1992-93 Operating Budget.

       Through a series of slides, President Wethington reviewed and
elaborated on a summary of state budget reductions, tuition revenue
increases, available resources, expenditures for program support, use of
$1.3M special state appropriation, fixed costs, salaries/operating
expenses, employee benefits, priorities for the University, program
improvement, expenditures for program support, other income, capital
budget, and the operating budget by category of expenditures.

       In summary, President Wethington said that, in his opinion, it was
a good operating budget given the constraints within which the staff had
to work. He noted that the members of the Board and media had been given
an opportunity to ask questions and get informed about the budget. He
said that it was essential that the Board approve the budget in order for
the University to operate beginning July 1, 1993. He recommended approval
of FCR 8.

       On behalf of the Finance Committee, Mr. Hardymon moved that the
budget as recommended be adopted and that the chairperson of the Board be
authorized to execute contracts with the administrative officers providing
for the terms and conditions of their employment.

       Professor Sistarenik said that he had no problem with the overall
budget given the restrictions and limitations that President Wethington
had mentioned in his presentation. However, he said that he had serious
reservations about one portion of the budget dealing with the substantial
raises to deans of academic affairs and deans of business affairs in the
Community College System. He noted that this was a worthy attempt to
bring them closer to their benchmark median and the raises may be well
deserved, but that he questioned these salary increases in times of fiscal
austerity.