xt7t7659f94j https://exploreuk.uky.edu/dips/xt7t7659f94j/data/mets.xml Lexington, Kentucky University of Kentucky 2012 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, 2012-10-14 text Minutes of the University of Kentucky Board of Trustees, 2012-10-14 2012 2014 true xt7t7659f94j section xt7t7659f94j Minutes of the Meeting of the Board of Trustees of the University of Kentucky, Sunday,
October 14, 2012
The Board of Trustees of the University of Kentucky met on Sunday, October 14, 2012 in
the Board Room on the 18th floor of Patterson Office Tower.
A.

Meeting Opened

Dr. E. Britt Brockman, chair of the Board of Trustees, called the meeting to order at 1:40
p.m. Chair Brockman asked Trustee Sheila Brothers, 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: C.B.
Akins, Sr., Stephen Bilas, E. Britt Brockman, Sheila Brothers, Mark Bryant, Jo Hern Curris,
Oliver Keith Gannon, Kelly Sullivan Holland, Pamela T. May, Billy Joe Miles, Terry Mobley,
Charles Sachatello, C. Frank Shoop, James W. Stuckert, Irina Voro, John Wilson, and Barbara
Young. Absent from the meeting was William C. Britton, William S. Farish, and Carol Martin
“Bill” Gatton. Secretary Brothers announced that a quorum was present.
The University administration was represented by President Eli Capilouto, Interim
Provost Tim Tracy, Vice President for Health Affairs Michael Karpf, General Counsel-Select
William Senior Associate General Counsel T. Lynn Williamson.
The University faculty was represented by Chair of the University Senate Council Lee
Blonder, and the University staff was represented by Chair of the Staff Senate Mike Adams.
Guests and members of the news media were also in attendance.
C.

Consent Items

Chair Brockman called attention to the one consent item on the agenda, the minutes for
the regular meeting of the Board on September 11, 2012. Trustee Stuckert moved approval of
the consent items. Trustee Akins seconded the motion, and it carried without dissent. (See
consent items listed below on the Board of Trustees website, www.uky.edu/Trustees, under
agenda.)
Minutes, September 11, 2012
D.

Chairman’s Report

Chair Brockman began by reporting that there had been no requests since the last meeting
to speak or appear before the Board.

* Chair Brockman announced that the Executive Committee would be tasked with a review
of the current committee structure of the Board of Trustees, with a report to the Board at the
December 11, 2012 meeting.
Chair Brockman extended thanks to those involved in making the Board of Trustees
retreat meaningful and productive. For their efforts, he offered special thanks to Amy Hisel, Bill
Swinford, Angie Martin, Bob Wiseman, Jay Blanton, Jim Tracy, Vince Kellen, Provost Tim
Tracy, President Capilouto, the staff of University Sound and Lights, UK Catering, Physical
Plant Division, and UK Information Technology. The Board gave a round of applause.
E.

Proposed Guiding Principles for the President and the Campus (CR 1)

Chair Brockman introduced CR 1, the guiding principles for the President and the
campus. These guiding points were a result of the discussions from the weekend’s retreat. The
recommendation is that the President, in recognition of the rapidly changing environment of
higher education, and in consultation with University constituents, focus the University’s efforts
on the following:
•

Continuing emphasis on undergraduate education and infrastructure of the campus
core;

•

Strengthening mechanisms for faculty and staff recruitment, rewards and retention;

•

Conducting an assessment of what constitutes a strong environment for research,
creative scholarship, and graduate and professional education;

•

Continuing the development and introduction of the values-based financial model that
aligns revenues and expenses to meet the University’s mission, and ensure that units
develop strategic plans in alignment with University’s overall strategic planning
process;

•

Developing a plan for implementing innovative, technology-rich content delivery to
address needs in a constantly changing learning environment; and

•

Continuing to develop a master plan that creates a 21st century living-learning
environment and is sensitive to community concerns.

Chair Brockman asked for discussion. As there was no discussion, the motion passed,
with one abstention from Trustee Voro. (See CR 1 on the Board of Trustees website,
www.uky.edu/Trustees, under agenda.)
F.

Nominating Committee Report

Trustee Shoop, Chair of the Nominating Committee reported that the Committee met that
morning and received two NCRs.

-2-

* G.
Reappointment of Board of Director University of Kentucky Mining Engineering
Foundation, Inc. (NCR 1)
Trustee Shoop stated that NCR 1 recommends that the Board approve the reappointment
of Mr. James W. Stuckert as a trustee member to the University of Kentucky Mining
Engineering Foundation Inc. Board of Directors for two-year term ending September 30, 2014.
The bylaws of the Foundation require that the Board of Trustees approve appointments to the
Board of Directors.
On behalf of the Nominating Committee, Trustee Shoop moved approval of NCR 1 and it
passed without dissent. (See NCR 1 on the Board of Trustees website, www.uky.edu/Trustees,
under agenda.)
H.
Appointment of Trustee to the University of Kentucky Research Foundation
Board of Directors (NCR 2)
Trustee Shoop stated that NCR 2 recommended that the Board approve the appointment
of Mr. Mark P. Bryant as a trustee member to the University of Kentucky Research Foundation
Board of Directors for a three-year term ending September 30, 2015. The bylaws of the
Foundation require that the Board of Trustees approve appointments to the Board of Directors.
On behalf of the Nominating Committee, Trustee Shoop moved approval of NCR 2 and
it passed without dissent. (See NCR 2 on the Board of Trustees website, www.uky.edu/Trustees,
under agenda.)
I.

Athletics Committee Report

Trustee Akins, Chair of the University Athletics Committee, reported that the Committee
met that morning to discuss two items. The Committee reviewed and endorsed PR 1, a revision
of Governing Regulation II regarding an increase to the threshold amount for review of Athletics
capital projects.
The committee then considered the financial statements of the University of Kentucky
Athletics Association (UKAA) and the Department of Intercollegiate Athletics. Mary McKinley
partner with the BKD, the University’s external auditors, provided a brief overview of the annual
audit process in the Audit Subcommittee. As an affiliated corporation, UKAA was included in
the University’s consolidated financial statement. BKD issued unqualified opinions on the
University’s and UKAA’s separately presented financial statements.
Trustee Akins stated that with the dissolution of UKAA, the external auditors will
perform a separate audit of the Department of Intercollegiate Athletics in the future. As part of
the transition, Angie Martin, Treasurer, reviewed the unaudited financial statements of the
department which consolidated UKAA and other Athletic operations. The Committee accepted
the financial statements as presented.

-3-

* J.

Proposed Revision to the Governing Regulation: University Athletics Committee

(PR 1)
President Capilouto stated that PR 1 recommended that the Board of Trustees receive and
vote to accept for the first reading the revision of Governing Regulation II relating to the
University Athletic Committee. The revision increases the threshold amount the Committee
must review for capital projects in Athletics from $400,000 to $600,000. On a motion made by
Trustee Akins, seconded by Trustee Curris, PR 1 passed without dissent. (See PR 1 on the Board
of Trustees website, www.uky.edu/Trustees, under agenda.)
K.

Honorary Degree Recipients (PR 2)

President Capilouto asked the Board to consider PR 2. Pursuant to the Conditions of
Merit for Honorary Degrees, the University Joint Committee on Honorary Degrees has
recommended to the elected faculty senators of the University Senate that the specified honorary
degrees be awarded to James D. (J.D.) Crowe, David L. Lawless, and Charles L. Shearer. The
elected faculty senators approve this recommendation.
Trustee Stuckert moved approval of PR 2. It was seconded by Trustee Mobley and
passed without dissent. (See PR 2 on the Board of Trustees website, www.uky.edu/Trustees,
under agenda.)
L.
Resolution of the Board of Trustees of the University of Kentucky Relating to the
Relating to the Refunding of Bonds heretofore Issued in Accordance with a Lease Agreement
among the University, the Kentucky Asset/Liability Commission, the Finance and
Administration Cabinet of the Commonwealth of Kentucky and the State Property and Buildings
Commission of the Commonwealth of Kentucky (FCR1)
Trustee Stuckert, chair of the Finance Committee, stated that the FCR 1 concerned the
refunding of several bonds from 1998 and 2002. On behalf of the Finance Committee, he moved
adoption of FCR 1 and it passed without dissent. (See FCR 1 on the Board of Trustees website,
www.uky.edu/Trustees, under agenda.)
M.
Acceptance of Audit Report and the Report on Internal Control for the University
of Kentucky for FY 2011-12 (FCR 2)
Trustee Stuckert stated that FCR 2 involved the acceptance of the audit report and the
report on the internal control for the University of Kentucky for the fiscal year 2011-12. He
reminded the Board that all FCRs were fully vetted at the Finance Committee meeting that met
prior to the Board meeting.
On behalf of the Finance Committee, Trustee Stuckert moved approval of FCR 2. Dr.
Brockman opened the floor for discussion.
Trustee Voro stated she would abstain from the vote due to her confusion regarding
BKD’s non-audit of KMSF and their non-opinion on the Management’s Discussion and Analysis
portion of the financial statement. She also asked the cost of the external audit and if an audit of
UK’s management had been performed in recent years.
-4-

* Trustee Stuckert stated that the cost of the external audit is $336,000.
With no further discussion, the vote was 16 affirmative votes with one abstention from
Trustee Voro. (See FCR 2 on the Board of Trustees website, www.uky.edu/Trustees, under
agenda.)
N.
Authorization of Lease for Phase II-A Housing and Amendment for Phase I
Ground Lease (FCR 3)
Trustee Stuckert stated that FCR 3 involved the authorization of the lease for Phase II-A
Student Housing and Amendment for Phase I Ground Lease. He reported that Treasurer Angie
Martin and Vice President Bob Wiseman gave a comprehensive report at the Finance Committee
meeting regarding these two items.
On behalf of the Finance Committee, Trustee Stuckert moved approval of FCR 3 and it
passed without dissent. (See FCR 3 on the Board of Trustees website, www.uky.edu/Trustees,
under agenda.)
O.

Approval of Lease (FCR 4)

Trustee Stuckert stated that FCR 4 involved the approval of a lease with Royal Lexington
Apartments in the amount of approximately $2.2 million for 364 beds effective August 1, 2013
through June 30, 2014. This proposed lease will be funded from housing revenues.
On behalf of the Finance Committee, Trustee Stuckert moved approval of FCR 4 and it
passed without dissent. (See FCR 4 on the Board of Trustees website, www.uky.edu/Trustees,
under agenda.)
P.

Other Business

Trustee Curris congratulated the cast and crew, the College of Fine Arts and former
Board of Trustees member Everett McCorvey for the Phantom of the Opera performance.
Trustee Young and President Capilouto also added their compliments.
Trustee Voro drew the Board’s attention to the memorandum from Senate Council Chair
Lee X. Blonder. She reported that there had been two faculty forums to discuss the second round
of budget cuts. She reminded the Board that President Capilouto would address the University
Senate on October 22nd.
Trustee Young asked Trustee Voro what percentage of faculty attended or responded to
the forums. A discussion followed regarding the faculty’s concern of the current budget
situation. Dr. Blonder and Trustee John Wilson both summarized that the faculty are very
concerned and look forward to the continued dialogue with President Capilouto regarding this
important issue.

-5-

* Q.

Meeting Adjourned

Hearing no further business, Chair Brockman adjourned the meeting at 2:02 p.m.

Respectfully submitted,
Sheila Brothers,
Secretary

(CR 1, NCR 1 and 2, PR 1 and 2, FCR 1, 2, 3 and 4 are official parts of the Minutes of the
meeting.)

-6-

* CR 1
Chairman, Board of Trustees
October 14, 2012

Members, Board of Trustees:

PROPOSED GUIDING PRINCIPLES FOR THE PRESIDENT AND THE CAMPUS

Recommendation: that the President in recognition of the rapidly changing environment of
higher education, and in consultation with University constituents, focus the University's efforts
on:
•

Continuing emphasis on undergraduate education and infrastructure (campus core);
and

•

Strengthening mechanisms for faculty and staff recruitment, rewards and retention;
and

•

Conducting an assessment of what constitutes a strong environment for research, creative
scholarship, and graduate and professional education; and

•

Continuing the development and introduction of the values-based financial model that
aligns revenues and expenses to meet the University's mission, and ensure that individual
units develop strategic plans in alignment with the University's overall strategic
planning process; and

•

Developing a plan for implementing innovative, technology-rich content delivery to
address needs in a constantly changing learning environment; and

•

Continuing to develop a master plan that creates a 21st century living and learning
environment and is sensitive to community concerns.

Action taken:

 Approved

 Disapproved

 Other

* NCR 1
Office of the President
October 14, 2012

Members, Board of Trustees:

REAPPOINTMENT OF BOARD OF DIRECTOR
UNIVERSITY OF KENTUCKY MINING ENGINEERING FOUNDATION, INC.

Recommendation: that the Board of Trustees approve the reappointment of Mr. James W.
Stuckert as a Trustee member to the University of Kentucky Mining Engineering Foundation,
Inc. Board of Directors for a two-year term ending September 30, 2014.
Background: In accordance with the Bylaws of the University of Kentucky Mining Engineering
Foundation, Inc., two members shall be from the Board of Trustees, and those appointments shall
be approved by the Board of Trustees. The term shall be for two years. Trustee appointments to
affiliated boards must be approved by the Nominating Committee before submission to the
Board.

Action taken:

 Approved

 Disapproved

 Other ______________________

* NCR 2
Office of the President
October 14, 2012

Members, Board of Trustees:

APPOINTMENT OF TRUSTEE TO THE UNIVERSITY OF KENTUCKY
RESEARCH FOUNDATION BOARD OF DIRECTORS

Recommendation: that the Board of Trustees approve the appointment of Mr. Mark P. Bryant as
a Trustee member to the University of Kentucky Research Foundation (UKRF) Board of
Directors for a term ending September 30, 2015.
Background: In accordance with the Bylaws of the University of Kentucky Research
Foundation, two members shall be from the Board of Trustees. The term shall be for three years.
Trustee appointments to affiliated boards must be approved by the Nominating Committee
before submission to the Board. Mr. Bryant is replacing former Board member Mr. Erwin
Roberts whose term on the Board of Trustees had expired on June 30, 2012.

Action taken:

 Approved

 Disapproved

 Other ______________________

* PR 1
Office of the President
October 14, 2012

Members, Board of Trustees:

PROPOSED REVISION TO GOVERNING REGULATION:
UNIVERSITY ATHLETICS COMMITTEE
Recommendation: that the Board of Trustees receive and vote to accept for the first
reading the attached revision of Governing Regulation (GR) II, relating to the University
Athletics Committee. The revision increases the threshold amount the Committee must
review for capital projects in Athletics from $400,000 to $600,000.
Background: When the University Athletics Committee of the Board was established in
2011, it was charged with reviewing capital construction projects if the cost is expected
to exceed $400,000. The proposed revision increases this amount to $600,000 to be
consistent with the amount the Board’s Finance Committee reviews for capital projects,
and also with state laws regarding capital projects that must have legislative
authorization.
A revised copy of the relevant section of GR II is attached. Proposed additions are
underlined; proposed deletions are lined through.
At the time of the printing of the agenda book, the proposed revision is being circulated
to the following constituencies: the University Senate, the Staff Senate and the Student
Government Association.

Action taken:

 Approved

 Disapproved

 Other

* * * PR 2
Office of the President
October 14, 2012

Members, Board of Trustees:

HONORARY DEGREE RECIPIENTS
Recommendation: that the Board of Trustees approve awarding the degree of Honorary Doctor
of Arts to James Dee (“J.D.”) Crowe and an Honorary Doctor of Letters to David L. Lollis and
an Honorary Doctor of Letters to Charles L. Shearer as approved and recommended by the
University Faculty.
Background: Pursuant to the Conditions of Merit for Honorary Degrees, the University
Joint Committee on Honorary Degrees has recommended to the elected Faculty Senators that the
specified honorary degree be awarded to James Dee (“J.D.”) Crowe, David L. Lollis, and
Charles L. Shearer. The elected Faculty Senators have approved the recommendation.
Biographical sketches of the recipients are attached.

Action taken:

 Approved

 Disapproved

 Other ______________________

* James Dee ("J.D.") Crowe - Honorary Doctorate Citation - 2012
James Dee ("J.D.") Crowe, a native of Lexington and resident of Nicholasville, Kentucky
began playing the banjo when he was 12 years old and was informally apprenticed to
the late bluegrass music great, Earl Scruggs. In the mid 1950's, he was offered a job
with Jimmy Martin's Sunny Mountain Boys while still in his teens.
In the late 1960's, Crowe formed the Kentucky Mountain Boys, principally performing in
Central Kentucky and other areas of the commonwealth. By the early 1970's, J.D.
changed the band's name to The New South and included material from rock and
country music sources. Many important musicians have been a part of the band over
the years, including Ricky Skaggs, Keith Whitley, Tony Rice, Jerry Douglas, and Doyle
Lawson. After recording more than a dozen albums and having played literally all over
the United States and in numerous foreign countries, Crowe is universally recognized
as a great ambassador for Kentucky, and for bluegrass music. Inducted into the
International Bluegrass Music Association's Hall of Fame in 2003, he is also a recipient
of the Kentucky Governor's Award in the Arts for his contributions to the state's folk
heritage.
The subject of a book-length biography and a 90-minute television tribute in recent
years, Crowe is acclaimed for exemplifying the highest ideals of artistic creativity and
musical innovation over a career that spans more than half a century.
This banjoist and bandleader's sense of service to the University of Kentucky is real and
demonstrable. J.D. is revered as a teacher, and not only by other musicians privileged
to join his band. When asked by UK faculty, he has freely and repeatedly donated his
time to appear in English and music classes where students learn about Appalachian
music and bluegrass music, as well as Kentucky and southern culture and history.
Crowe humbly, yet readily shares with these students an abundance of detailed
information and the unique perspective of a master artist.
This native son of the commonwealth has helped immeasurably to expand the audience
for bluegrass music, Kentucky's enduring musical gift to the world. For all of his
accomplishments, James Dee ("J.D.") Crowe is recommended for an honorary Doctor
of Arts degree from the University of Kentucky.

* David L. Lollis - Honorary Doctorate Citation - 2012
David L. Lollis is the past president of Appalbanc and is the past president of the
Federation of Appalachian Housing Enterprises (FAHE). Appalbanc is an awardwinning Community Development Financial Institution (CDFI) whose primary mission is
to promote individual and community development in rural central Appalachia through
the financial products developed by the Human/Economic Appalachian Development
Corporation (HEAD), the Federation of Appalachian Housing Enterprises, Inc. (FAHE),
and the Appalachian Federal Credit Union (AFCU).
As president of FAHE, Lollis was responsible for the Federation’s programs. He has an
extensive background in administration and management, much of which has been in
housing programs. David has worked for over 40 years in both the public and private
sectors.
His federal government experience includes positions in the Commerce Department’s
Office of Business Economics; in the Labor Department’s Employment and Training
Administration; and in the Office of Economic Opportunity/Community Services
Administration.
At the state government level Lollis served in the Kentucky Governor’s Office, the Office
of Policy and Management, and the Office of the Secretary of the Department for
Human Resources. He was elected Chair of the Appalachian Advisory Council and was
appointed by the Governor as a Commissioner of the Kentucky Appalachian
Commission.
At the annual Kentucky Governor’s Housing Conference in 1992, David was presented
the Dorothy J. Williams' Lifetime Achievement Award for his contribution for
conceptualizing and directing quality housing programs in Kentucky.
Besides his distinguished record of community and government service, Lollis directed
the Mount Beulah Center in Edwards, Mississippi under the auspices of the Christian
Church. In this role, he was a tireless advocate for civil rights. David also worked as an
associate professor at New York University in their Center for the Study of the
Unemployed.
In retirement, he continues to serve on a number of national, regional, and local boards,
and serves as a consultant on various projects. For all of his accomplishments, David
L. Lollis is recommended for an honorary Doctor of Letters degree from the University of
Kentucky.

* Charles L. Shearer - Honorary Doctorate Citation - 2012
Charles L. Shearer, a native of Louisville, earned a bachelor of science degree in
accounting, followed by a master's in diplomacy and international commerce, both from
the University of Kentucky.
Intrigued by his first teaching assignment in higher education as an instructor at UK's
Henderson Community College in the late 1960's, Shearer went on to pursue further
graduate study, attaining his Ph.D. in economics from Michigan State University.
Following additional teaching and administrative assignments, first at Michigan State,
then at Albion College, Charles was named Vice President for Finance at Transylvania
University in Lexington in 1979.
He was selected as president of Transylvania in 1983, beginning what would become a
long and distinguished tenure at the helm of the 16th oldest college in the United States.
During Shearer's 27 years at Transy's helm, the institution's student enrollment grew by
more than 75 percent, with corresponding growth in the number of faculty members and
majors offered. Fund-raising, together with financial aid and scholarship programs,
increased exponentially under his leadership. Transylvania reached a number-12
ranking among national liberal arts colleges for its alumni participation rate. Ratings for
the university's academic quality attained unprecedented heights. The school's
endowment grew to an all-time high. The Bingham Program for Excellence in Teaching
was established to reward outstanding faculty members. A number of state-of-the-art
academic buildings, a new campus center, new residence hall construction, and greatlyimproved facilities for athletics and recreation were added during Charles' nearly three
decades as the university's top officer.
One of the most important initiatives in the area of athletics during Charles' tenure was
the move from the scholarship-based National Association of Intercollegiate Athletics
(N-A-I-A) to the non-scholarship Division Three of the National Collegiate Athletic
Association (N-C-A-A). This placed Transy among its peer institutions, with a
dedication to the student-athlete ideal in the context of the overall academic and social
purposes of the university.
In the community, President Shearer instituted the First-year Urban Program where
freshman students actively participate in service projects. Other student service
initiatives begun under his direction include Alternative Spring Break, Jump-Start, and
an annual holiday party for children of the Big Brothers/Big Sisters of the Bluegrass.
Charles' service on the boards of countless organizations, his selection as a recipient of
numerous local, state, and national awards, and his principled leadership as a
champion of intellectual rigor and academic freedom - For all of his accomplishments,
Charles L. Shearer is recommended for an honorary Doctor of Letters degree from the
University of Kentucky.

* FCR 1
Office of the President
October 14, 2012

Members, Board of Trustees:
RESOLUTION OF THE BOARD OF TRUSTEES OF THE UNIVERSITY OF
KENTUCKY RELATING TO THE REFUNDING OF BONDS HERETOFORE
ISSUED IN ACCORDANCE WITH A LEASE AGREEMENT AMONG THE
UNIVERSITY, THE KENTUCKY ASSET/LIABILITY COMMISSION, THE
FINANCE AND ADMINISTRATION CABINET OF THE
COMMONWEALTH OF KENTUCKY AND THE STATE PROPERTY AND
BUILDINGS COMMISSION OF THE COMMONWEALTH OF KENTUCKY
Recommendation: That the Board of Trustees adopt the Resolution attached hereto authorizing
the execution and delivery of such agreements, certificates and instruments that may be
necessary or appropriate for the refunding of outstanding Agency Fund Revenue and Revenue
Refunding Bonds, Project No. 80, Series A (the "Prior Bonds") of State Property And Buildings
Commission (the "Commission").
Background: The Prior Bonds were issued to finance the Center for Rural Health and the
Commonwealth Stadium Expansion projects under Financing/Lease Agreements dated as of
August 1, 1998 and June 26, 2002, respectively (the "Leases") among the University, the
Commission, the Kentucky Asset/Liability Commission and the Finance and Administration
Cabinet. The Prior Bonds can be refunded to achieve debt service savings. This Resolution
authorizes the delivery of any agreements, certificates and instruments of the University that may
be required for the refunding of the Prior Bonds by the Commission.

____________________________________________________________________________
Action taken:



Approved

 Disapproved

 Other__________________

* RESOLUTION OF THE BOARD OF TRUSTEES OF THE UNIVERSITY OF
KENTUCKY RELATING TO THE REFUNDING OF BONDS HERETOFORE
ISSUED IN ACCORDANCE WITH A LEASE AGREEMENT AMONG THE
UNIVERSITY, THE KENTUCKY ASSET/LIABILITY COMMISSION, THE
FINANCE
AND
ADMINISTRATION
CABINET
OF
THE
COMMONWEALTH OF KENTUCKY AND THE STATE PROPERTY AND
BUILDINGS COMMISSION OF THE COMMONWEALTH OF KENTUCKY
WHEREAS the University of Kentucky has heretofore entered into a Financing/Lease
Agreement dated as of August 1, 1998, with the Kentucky Asset/Liability Commission
("ALCO"), the State Property And Buildings Commission of the Commonwealth of Kentucky
(the "Commission") and the Finance and Administration Cabinet of the Commonwealth of
Kentucky (the "Cabinet") related to the Commonwealth Stadium Expansion (the "1998 Lease"),
and a Financing/Lease Agreement dated as of June 26, 2002, with ALCO, the Commission and
the Cabinet related to the Center for Rural Health (the "2002 Lease" and together with the "1998
Lease," the "Leases"); and
WHEREAS, the Commission has, in accordance with the Leases, previously issued and
there are outstanding the Commission's Agency Fund Revenue and Revenue Refunding Bonds,
Project No. 80, Series A (the "Prior Bonds"); and
WHEREAS, the Commission intends, in cooperation with the University, to issue
revenue bonds (the "Bonds") for the purpose of refunding the Prior Bonds which Bonds will
constitute Related Bonds, as defined in the 1998 Lease, and Bonds, as defined in the 2002 Lease,
the principal of and interest on which will be payable under the Lease as the Debt Servicing
Obligation, as defined in the respective Lease; and
NOW THEREFORE, it is hereby resolved and ordered by the Board of Trustees of the
University of Kentucky as follows:
Section 1. Determinations. This Board of Trustees hereby finds and determines that the
facts set forth in the recitals to this Resolution.
Section 2. Authorizations. The Chairman and Treasurer are each hereby authorized to
execute, acknowledge and deliver, on behalf of the University, such agreements, certificates and
instruments that may be necessary or appropriate, in the opinion of Peck, Shaffer & Williams
LLP, as bond counsel for the Commission, in order to effect the refunding of the Prior Bonds and
the intent of this Resolution, including, but not limited to, any amendments or supplements to the
Leases.
Section 3.
adoption.

Effective Date.

This resolution shall take effect immediately upon its

ADOPTED AND APPROVED this _____ day of October, 2012.
UNIVERSITY OF KENTUCKY ,
STATE AGENCY
By:
Chairman

* CERTIFICATE
It is certified that the foregoing is a true and correct copy of a resolution duly adopted by
the Board of Trustees of the University of Kentucky on the _____ day of October, 2012, and
such resolution has not been altered, amended or repealed.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this _____ day
of _______________, 2012.
_________________________________________
Secretary

70035vv3

2

* FCR 2
Office of the President
October 14, 2012

Members, Board of Trustees:
ACCEPTANCE OF AUDIT REPORT
AND THE REPORT ON INTERNAL CONTROL
FOR THE UNIVERSITY OF KENTUCKY FOR FY 2011-12
Recommendation: that the Board of Trustees accept (1) the University of Kentucky
audited financial statements for the fiscal year ended June 30, 2012, consisting of the
Statements of Net Assets; Statements of Revenues, Expenses and Changes in Net Assets;
Statements of Cash Flows; Notes to Financial Statements; and Management’s Discussion
and Analysis; and (2) the Independent Auditor's Report on Internal Control Based on the
Audit of Financial Statements.
Background: The financial statements for the year ended June 30, 2012 have been
audited by BKD LLP, Certified Public Accountants. The financial statements were
prepared in accordance with Governmental Accounting Standards Board (“GASB”)
Statement No. 35, Basic Financial Statements – and Management’s Discussion and
Analysis – for Public Colleges and Universities, which focuses on the financial condition,
results of operations, and cash flows of the University as a whole, with resources
classified for accounting and reporting purposes into four net asset categories: invested in
capital assets (net of related debt), restricted-nonexpendable, restricted-expendable, and
unrestricted. The Audit Subcommittee has reviewed the financial statements and the
auditor’s report.
The financial statements of the University include its operations, the UK HealthCare
Hospital System (an organizational unit of the University), the University’s for-profit
subsidiary (Kentucky Healthcare Enterprise, Inc.), and its affiliated non-profit
corporations [i.e. entities for which the University is financially accountable as defined
by GASB Statement No. 14 and amended by GASB Statement No. 39 which meet the
definition of an affiliated corporation under Kentucky Revised Statute (KRS) section
164A.550]:
• The University of Kentucky Research Foundation and its for-profit subsidiaries
(Kentucky Technology, Inc. and Coldstream Laboratories, Inc.);
• The Fund for Advancement of Education and Research in the University of
Kentucky Medical Center;
• University of Kentucky Athletic Association;
• Central Kentucky Management Services, Inc.;
• University of Kentucky Mining Engineering Foundation, Inc.;
• University of Kentucky Gluck Equine Research Foundation, Inc.;

* •
•

University of Kentucky Humanities Foundation, Inc.; and
University of Kentucky Center on Aging Foundation, Inc.

The financial statements also i