xt7m901zdc7g https://exploreuk.uky.edu/dips/xt7m901zdc7g/data/mets.xml Lexington, Kentucky University of Kentucky 19650812 minutes English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 1965-08-aug12-ec. text Minutes of the University of Kentucky Board of Trustees, 1965-08-aug12-ec. 1965 2011 true xt7m901zdc7g section xt7m901zdc7g 











      Minutes of the Special Called Session of the Executive Committee of the
Board of Trustees of the University of Kentucky, Thursday, August 12, 1965


       The Executive Committee of the Board of Trustees of the University of
Kentucky met in special called session at 4:30 p. m. , Eastern Standard Time,
on Thursday, August 12, 1965, in the Board Room of the Administration Building
on the campus with the following members present: Dr. Ralph Angelucci,
Chairman, Judge Jarmes A. Sutherland, Secretary, and Dr. H. B. Murray. Mr.
Robert Hillenmeyer and Mr. Smith Broadbent were unable to attend. Vice Presi-
dents A.D. Albright and Robert F. Kerley represented the administration and
members of the press were present.


      A. Meeting Opened

      Dr. Angelucci called the meeting to order at 4:35 p. m. and, having de-
termined that a quorum was present, declared the meeting officially open for the
conduct of business.


       B. Student Residence Complex Financing--Loan Agreement with HHFA
Authorized

       Dr. Angelucci explained that the meeting was called for the purpose of
authorizing Mr. Robert F. Kerley, Vice President-Business Affairs, to enter
into an agreement with the Housing and Home Finance Agency for financing the
construction of the first phase of the dormitory complex. He then requested Mr.
Kerley to present the recommendation and background statement.

       Mr. Kerley read the following recommendation:


Recommendation: that the Vice President-Business Affairs and Treasurer be
authorized to execute, on behalf of the University of Kentucky, an agreement
between the University of Kentucky and the Housing and Home Finance Agency
of the federal government, under which agreement the Housing and Home Fi-
nance Agency commits itself to the purchase of bonds, when issued by the Uni-
versity of Kentucky, in an amount up to $8, 000, 000 and bearing the legal rate
of interest and containing other conditions governing such bond purchases by the
Housing and Home Finance Agency, the proceeds derived from such bonds, when
issued, to be used for the purpose of partial financing of the student residence
complex previously authorized by the Board of Trustees.



Bids for the initial elements for Phase I of the Dormitory Complex were




 











opened at 2:00 o'clock on Thursday, August 12, in the office of Mr. Felix Joyner
of the State Department of Finance. A letter from the federal government is ex-
pected on Friday, August 13, which will indicate an agreement to enter into a
loan agreement with the University of Kentucky for the purpose of partial financ-
ing of the student residence complex previously authorized by the Board of
Trustees. This letter with Trustees action recommended will permit the De-
partment of Finance to award bids. The next step will be the execution of the
loan agreement, for which authority is being requested, and this will be done as
soon as it can be put together.

       Mr. Kerley indicated that a proposed trust indenture would be presented
to the full Board at a later meeting, explaining that while it is presently in the
hands of the federal government for final, detailed review, all matters of
substance have already been settled. It will consolidate all previous bond issues
into a single issue and will also provide for additional financing. This will be
known as the University of Kentucky Housing and Dining System and will be in an
amount of $28, 000, 000 or $29, 000, 000. This issue will include the following
series of bonds:

       Series A-G for $8, 135, 000 of new bonds to be issued in exchange
       for bonds presently held by HHFA.

       Series H for $3, 732, 000 of new bonds to be used to refund or
       escrow bonds held by private individuals and an estimated
       $1, 500, 000 for costs the federal government will not recognize
       in its participation. Where it is to the advantage of the Trustees
       to call bonds, they will be called and the premium paid; where it
       is not to their interest to call the bonds, the proceeds will be
       invested in the hands of trustee banks to retire the bonds when
       they come due.

       Series I for $16, 000, 000 (or whatever amount the final bids re-
       quire) to be sold as follows: $8, 000, 000 to HHFA, under lan
       agreement to be authorized today, and $8, 000, 000 or balance to
       private investors on the open market.

       Mr. Kerley summarized the proposed financing as follows: a total of
$16, 135, 000 will be in the hands of HHFA with the balance of approximately
$13, 000, 000 being in the hands of private investors. The advantages of the con-
solidated bond issue are (1) the bonds are more attractive on the market because
they have the strength of the revenue of the entire operation which should have a
good effect upon the interest rate; (2) the University can move on to additional
financing with added strength of the consolidation; (3) as the cost of living moves
up, dormitory rates can be increased to meet costs and the entire strength of the
price increase can go into the issue. Presently, increases in rates are applica-
ble only for the dormitory concerned; and (4) increases immediate bonding
capacity in excess of $20, 000, 000 and provides a mechanism for continuous fi-
nancing of additional facilities.




 





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       In answer to a question by Dr. Angelucci, Mr. Kerley explained that this
method had been used before by the federal government in refinancing certain
projects but never on such a large scale. The plan follows generally the pattern
used recently by Western Kentucky State College in its financing of housing fa-
cilities but it goes beyond that and provides innovations which were not included
in that particular agreement.

       It is hoped that the University of Kentucky Housing and Dining System bond
issue can be marketed about October 15 with December 1 as the target date for
the Trustees to deliver the bonds. In order to bring this bond issue to the at-
tention of investors and obtain widespread bidding on the bonds, it is planned for
representatives of the University to go on a "road tour", making trips to New York,
Chicago, and perhaps Los Angeles and San Francisco.

       In answer to a question by a member of the press, Mr. Kerley outlined the
proposed phasing of the dormitory complex as follows:

       Phase I - Will cost approximately $8, 000, 000 and will include
       five low-rise buildings housing 176 students each, a central
       dining facility, and costs of site preparation and bringing of
       major utilities from Rose Street. The timing calls for the five
       low-rise buildings to be ready by September 1966, the dining
       facility by December 1966.

       Phase II - Will cost approximately $8, 000, 000 and will include
       two 23-story buildings housing approximately 656 students each,
       three additional low-rise buildings for 176 students each, and
       costs of landscaping, etc. The timing for this calls for com-
       pletion by September 1967.

In addition, in September Crane and Gorwic, Planning Consultants, will present a
report containing a definitive site recommendation for additional housing for ap-
proximately 1, 000 students and another dining facility somewhere in the area east
of Haggin Hall. The completion date for this facility is set for September 1968.

       Mr, Kerley emphasized that the proposed indenture will in no way pre-
clude the development of student housing by private enterprise, either inde-
pendently or under the situation where the building is constructed by private
enterprise and leased to the University. It does, however, protect the bondholder
in that the Trustees are obligated to fill "system" housing and dining facilities
first.

       Dr. Angelucci thanked Mr. Kerley for his presentation and reminded the
members of the Executive Committee that the purpose of the meeting was limited
to the authorization for Mr. Kerlcy to enter into an agreement with HHFA, thus
permitting the Department of Finance to proceed with the awarding of bids on
Phase I of the dormitory complex.




 






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      On motion by Judge Sutherland, seconded by Dr. Murray, and so ordered
by the chairman, the recommendation presented by Mr. Kerley was approved
and he was authorized to execute the proposed loan agreement with HHFA.


      C. Meeting Adjourned

      Dr. Angelucci having first determined that there was no further business
to come before the meeting, called for a motion to adjourn. On motion duly made,
seconded, and carried, the special called meeting adjourned at 4:55 p. m.



                                     Respectfully submitted,



                                     James A. Sutherland, Secretary
                                     Board of Trustees