xt7vmc8rcj1t https://exploreuk.uky.edu/dips/xt7vmc8rcj1t/data/mets.xml Lexington, Kentucky University of Kentucky 2011 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, 2011-03-29 text Minutes of the University of Kentucky Board of Trustees, 2011-03-29 2011 2012 true xt7vmc8rcj1t section xt7vmc8rcj1t Minutes of the Meeting ofthe Board of Trustees of the University of Kentucky, Tuesday, March
29, 2011.
The Board of Trustees of the University of Kentucky met at 1:00 p.m. (Lexington time)
on Tuesday, March 29, 2011 in the Board Room on the 18m Floor of Patterson Office Tower.
A. Meeting Opened
Dr. E. Britt Brockman, chair ofthe Board of Trustees, called the meeting to order at 1:00
p.m. He asked Ms. Pam May, secretary of the Board, to call the roll.
B. Roll Call
The following members of the Board of Trustees answered the call ofthe roll: E. Britt
Brockman (chair), Penelope Brown, Jo Hem Curris, Dennontti Dawson, William S. Farish, Jr.,
Oliver Keith Gannon, Pamela T. May, Everett McCorvey, Billy Joe Miles, Teny Mobley, Sandy
Bugie Patterson, Erwin Roberts, Charles R. Sachatello, Frank Shoop, Ryan Smith, James W.
Stuckert, and Barbara Young. Absent from the meeting were Sheila Brothers, Carol Martin
"Bill” Gatton, and Joe Peek. Ms. May announced that a quorum was present.
The university administration was represented by President Lee T. Todd, Jr., Provost
Kumble Subbaswamy, Executive Vice President for Finance and Administration Frank Butler,
Executive Vice President for Health Affairs Michael Karpf; and General Counsel Barbara W.
The university faculty were represented by Chair of the University Senate Council Hollie
Swanson, and the university staff were represented by Chair ofthe Staff Senate Jann Burks.
Members ofthe various news media were also in attendance.
C. Consent Items
Dr. Brockman called attention to the two consent items: Minutes from the February 22,
2011 Board meeting and PR 2 dealing with personnel actions to be approved. Ms. Patterson
moved approval, and her motion was seconded by Mr. Stuckert. The motion carried without
dissent. (See consent items listed below at the end ofthese Minutes.)
Minutes February 22, 2011
PR 2 Personnel Actions
D. Chair’s Report
Dr. Brockman gave his report, leading off with his congratulations to three University of
Kentucky athletic teams. The first team is the rifle squad, which won the NCAA Championship.
Second is the women’s basketball team, whom he praised for their accomplishments in making it

to the NCAA women’s tournament. The last team to receive his congratulations was the men’s
basketball team, which advanced to the 20ll Final Four ofthe men’s NCAA teams. Dr.
Brockman asked that the record reflect how proud everyone is of these three athletic squads.
Dr. Brockman discussed the current opportunity for a self-examination ofthe govemance
and oversight of UK Athletics, which has just finished an entire decade without a serious athletic
violation. He announced the fonnation of a special committee which will examine, with
recommendations, UK Athletics practices as compared to both the practices of benchmark
institutions and the current best practice methodologies as suggested by the Association of
Goveming Boards of Universities and Colleges. Board member Teny Mobley will chair the
committee, which will also be composed of Keith Gannon, Bill Gatton, Billy Joe Miles, and
Frank Shoop from the Board of Trustees, Dean Scott Smith from the College of Agriculture, Joe
Fink, UK’s current faculty NCAA representative, Lionel Williamson, a current Athletic Board
member, and Myra Ball and Jim Hardymon from the community. President Todd and Dr.
Brockman will be ex officio members. The committee is expected to report to Dr. Brockman in
a timely manner after comprehensive data collection and careful deliberation.
Dr. Brockman asked Mr. Stuckert for a briefing on the activities ofthe Presidential
Search Committee.
E. Presidential Search Committee Report
Mr. Stuckert, chair ofthe Presidential Search Committee, began his report by asking for
an update from Ms. Curris and Ms. May on the UK Tour program.
Ms. Curris reminded board members ofthe purpose ofthe recent UK Tour of the
Commonwealth — to make contact with diverse citizens in order to collect their thought and ideas
with respect to what the board should consider in selecting the next president ofthe University of
Kentucky. The tour went to 16 sites across Kentucky, and she and Ms. May are in the process of
organizing the data and preparing a report for the board by April l5.
Ms. May thanked all tour participants and described the tremendous response from the
Trustees, UK staff and faculty, and others across the state. She also shared that President and
Mrs. Todd received glowing compliments at all ofthe stops on the tour. Next to come will be
the analysis of the data as she and Ms. Curris compile and summarize what they leamed.
Recognizing the efforts of Ms. Curris and Ms. May in organizing and implementing the
tour, Mr. Stuckert suggested that the board give them a round of applause and thanked them
again. He then reported on other activities ofthe search committee since the last board meeting.
On February 23, the day after the board meeting, the Presidential Search Committee met with the
consultants to review the prospects for consideration and selected a number of them for further
contact and discussed interview strategies. March 22 through 24, the committee met in Northern
Kentucky for interviews of leading candidates. Monday, April ll, the committee meets again to
select a number of candidates to refer to the Board of Trustees.

F. Public Forum for Presidential Search Finalist (PSCR 1 [
While in Northem Kentucky, the committee authorized that the consultants proceed with
referencing the candidates in preparation for the final selection. In addition, the committee
approved a motion that faculty, staff; students, and alumni be given the opportunity to meet the
candidate for the Office of President ofthe University of Kentucky at a public forum. Forum
attendees’ comments may be submitted the same day on a web-based survey tool to provide
infonnation to the Board of Trustees before any final action is taken on the candidate. The
committee’s intent to conduct the public forum is registered officially in PSCR 1. Mr. Stuckert
moved that PSCR 1 be approved by the Board. Dr. Brockman accepted a second from Ms.
Curris, and PSCR 1 was passed without dissent. (See PSCR 1 at the end ofthe Minutes.)
Mr. Stuckert thanked his committee, naming each member and the area of UK that they
represent, for their involvement in the exhausting and grueling 3.5 days in Northem Kentucky.
He also expressed his appreciation to Tom Harris and Jay Blanton for their activities as support
for the meetings. He especially thanked Peggy Way for her excellent organizational skills and
concem for the committee which she offered even in a time of great personal stress. Alan Saylor
and Robert McPherson from the UK Division of Police provided security for the group and
helped to make the interviews a success. Mr. Stuckert is confident that the ultimate result will
prove the efforts of these participants invaluable.
G. President’s Report (PR 1)
President Todd announced to board members that he would proceed quickly through PR
1 in his President’s Report. He reviewed the following items.
UK Rifle Team Wins First NCAA Championship
The president reinforced Dr. Brockman’s praise for the UK rifle team and brought the PR 1 item
to the Board’s attention. Heather Greathouse and Ethan Settlemires helped the team win the
overall title at the 2010-11 NCAA Championships on March 12 in Columbus, Georgia. The
NCAA Championship is the first in the history of the UK rifle program. Since the 1994 season,
the Wildcats have finished 16 times among the top ten teams at the national championships. In
claiming the 2010-11 national championship, the Wildcats have completed a historic season,
including an unbeaten regular-season slate in the Great American Rifle Conference
UK Opera Theatre Production Debuts New Projection Technology
After its successful first run of perfonnances at the Singletary Center in January and February,
the UK production collaboration on "Porgy and Bess” has now enjoyed a perfonnance with the
Atlanta Opera. The Center for Visualization and Virtual Environments (Viz Center) and UK
Opera Theatre have debuted new screen projection technology with UK Opera Theatre‘s
production ofthe American classic folk opera. Atlanta is the first professional opera company to
use the new technology. The president lauded the perfonnances and speculated that its next stop
might be Gennany.

University Press Publishes Book on Fonner UK President
President Todd mentioned Eric Moyen’s Frank L. M cVey and the University of Kentucky: A
Progressive President and the Modernization of a Southern University, the newest publication in
the University Press of Kentucky‘s Thomas D. Clark Studies in Education, Public Policy and
Social Change series. The book fills a gap in the biographies of UK presidents. The series is
made possible with support from UK‘s College of Education.
Merit Weekends Draw Prospective Students
Recruitment of top notch students as next year’s freshmen class appears to be in full swing at
UK, as witnessed by the fact that the Office of Undergraduate Admission hosted a record number
of academically talented prospective students from across Kentucky and 25 other states at the
annual Merit Weekends March 11-12 and 18-19. As of March 9, 840 students had registered for
Merit Weekends, compared with 781 last year. Merit Weekends are two-day events available by
invitation to admitted students who have excelled academically in high school. The president
praised Registrar Don Witt for the quantity and quality of his accomplishments.
Sarah Bennett Holmes Awards Honor Outstanding Women at UK
University of Kentucky Women‘s Forum presented the Sarah Bennett Holmes Awards, given
annually to women working at the University who promote the growth and well being of other
women. The 2011 faculty winner was Louise Graham, W. L. Mathews Professor of Law in the
UK College of Law, and the staff winner was Dana Walton-Macaulay, assistant director of
Residence Life for student rights and responsibilities. Twenty-one women from across campus
were nominated for the award. President Todd invited board members to view the Holmes
awards, which are displayed in the Main Building.
College of Phannacy Report
As part of his regular practice of showcasing individual colleges to the Board, President
Todd introduced Dean Tim Tracy ofthe College of Pharmacy as one of UK’s newest deans.
Dean Tracy started his presentation by offering a glimpse of the college. The nation’s fifth-
ranked College of Pharmacy is home to:
PhannD Students — 513
Graduate Students — 75
Postdoctoral Fellows — 22
Residents — 17
Faculty — 63
Staff — 109
Community-Based Faculty — 320
Alumni — 5,500 (BS/PhannD); 250 (PhD)
Dean Tracy said he likes to start with that listing because it speaks to the strength ofthe
College — its people. He said the college is dedicated to attracting top students, faculty, and staff

The college’s faculty remain committed to providing a world-class phannacy education. And the
college’s alumni continue to serve as change agents and economic development engines in
communities across the Commonwealth.
The dean took time to applaud the college’s community-based faculty. Phannacy
students are on campus receiving their classroom and laboratory education for the first three
years of school. During their fourth year, they are putting those lessons to work in communities
across Kentucky. The UK College of Pharmacy has more than 300 community-based faculty
across this state.
Those faculty members help the College of Phannacy live UK’s land-grant mission of
serving Kentucky communities every day. The college maintains a presence in communities
across Kentucky, with UK phannacy alumni working in 119 of 120 Kentucky counties. College
of Pharmacy faculty, students, and alumni are working every day to create healthier and
wealthier Kentucky communities.
Dean Tracy discussed how UK PhannD students are number one in the nation in first-
time pass rates (99.6 percent over the past 6 years) on the NAPLEX, the national licensing
examination. But that figure tells only part ofthe story. Eighty-six percent ofthe college’s
students are from Kentucky. They are Kentucky’s sons and daughters — the products of Pikeville
and Paducah and everywhere between. And every year, they show the world that they can
compete — that Kentucky kids are just as academically talented as any students in the nation.
The college is home to some of the top phannacy researchers in the word. Phannacy
researchers are currently ranked fourth in the nation in research productivity measures, and they
generate annual research expenditures of more than $11 million. Dean Tracy mentioned that the
college is in the process of hiring a high-profile researcher who will bring total funding of about
$13 million to the university.
Finally, Dean Tracy provided the Board of Trustees a glimpse into where the college is
headed in the months and years ahead. He said the college is putting the finishing touches on its
strategic plan, which will focus on four maj or pillars:
Innovations in Education
Research Enterprise Expansion
Practice Enhancement, Enrichment, and Engagement
Recruitment, Retention, and Academic Environment Refonn
Dean Tracy concluded his remarks by thanking the Board of Trustees for this opportunity
and opened the floor for questions.
In response to a question from President Todd, Dean Tracy commented on Phannacy’s
tradition of entrepreneurship. The college has one ofthe broadest intellectual property portfolios
in the university. It has multiple drugs that are in clinical trials, as well as drugs that are
receiving royalties for the college. The faculty show an entrepreneurial spirit, but they do so as

good stewards, with the hope of enhancing the health of not only Kentuckians, but also people
across the world.
President Todd expressed his appreciation to Dean Tracy for his presentation and to the
faculty and staff ofthe College of Phannacy for their accomplishments.
President Todd recognized Dr. JJ Jackson and Dr. Robert Mock, who have been selected
to participate in the Millennium Leadership Institute of the American Association of State
Colleges and Universities. This is a premier leadership development program that provides
individuals traditionally underrepresented in the highest ranks of higher education with the
opportunity to develop skills, to network, and to a gain philosophical overview to allow their
advance in the world of higher education. They were given a round of applause.
Also recognized was DanceBlue. The president asked Ms. Patterson, chair ofthe Student
Affairs Committee, to introduce students from the organization as our honored guests. She
introduced Matt Dempsey, who was the overall chair this year, Blake Willoughby, the corporate
chair, Dave Lowe, technology chair, Katherine Flynn, operations chair, and Clay Stanley, overall
chair for next year. The DanceBlue organization raised $675,000 in funds for the Pediatric
Oncology Center at UK Children’s Hospital. The audience showed their appreciation through a
round of applause. President Todd praised the students for their lasting contribution to the
university and expressed his wish that the tradition that they and others have put in place can be
sustained, even under challenging circumstances.
President Todd said that the Lexington Mayor Jim Gray had announced the previous day
a 42-member committee to look at downtown Lexington. UK’s 15-year agreement to remain in
Rupp Arena, signed during the president’s first months in office, is in place, and he feels that by
the time UK gets a new Rupp Arena, the university will have held its basketball games there for
nearly 40 years. Mitch Barnhart, Frank Butler, Everett McCorvey, William Farish, Dean
Michael Speaks, and Chainnan Britt Brockman are six members ofthe 42 that will work on the
four committees looking at all aspects of the future ofthe area.
H. Honorag Degree Recipients (PR 3)
President Todd thanked the Committee on Honorary Degrees for their work in selecting
these candidates and degrees for 20l l:
Barbara Hogan Honorary Doctor of Letters
Ahmed Kathrada Honorary Doctor of Letters
Robert M. Drake, Jr. Honorary Doctor of Science
T. Pearse Lyons Honorary Doctor of Letters
Albert P. Smith, Jr. Honorary Doctor of Letters
The president gave a short biography of each nominee and recommended that the
honorary degree recipient candidates listed in PR 3 be approved by the Board. Dr. Brockman
asked for a motion for approval, which was given by Mr. Mobley and seconded by Mr.
McCorvey. PR 3 passed without dissent. (See PR 3 at the end ofthe Minutes.)

I. University Research Professorships (PR 4)
President Todd next asked Dr. Jim Tracy, Vice President for Research, to assist in
announcing the University Research Professorships for 2011-12. Dr. Tracy expressed his
pleasure at being able to make these awards and stated that there were ten nominees this year,
which were peer reviewed by an ad hoc committee, and four were selected. These are
Karyn Esser Department of Physiology
Brandon Look Department of Philosophy
Gregory Smith Department of Psychology
Youling Xiong Department of Animal and Food Sciences
Upon Board approval, they will receive a one-year award of $40,000 and can use the title
of Research Professor throughout their future years at the university. He offered a brief
summary of the background and interests of each candidate as well as the research topic that will
be funded during their research professorship year. Each nominee received a round of applause.
President Todd recommended approval ofthe nominees. Dr. Brockman asked for a
motion of approval for PR 4. Mr. Stuckert moved approval. Ms. Curris seconded, and the
motion passed without dissent. (See PR 4 at the end of the Minutes.)
J. Establishment of Commonwealth Chair of Transportation Engineering (PR 5)
PR 5 establishes a Commonwealth Chair of Transportation Engineering in the College of
Engineering in conjunction with the Kentucky Transportation Cabinet. The Secretary of
Transportation will provide $50,000 annually for five years, with the possibility of extension. The
funds will support the research and professional activities of a highly qualified civil engineering
faculty member. President Todd recommended that the board approve this resolution. Dr.
Brockman asked for a motion of approval for PR 5. Mr. Roberts so moved and Ms. Patterson
seconded. The motion passed without dissent. (See PR 5 at the end ofthe Minutes.)
K. Candidate for Degree (AACR 1)
Dr. Brockman passed the floor to Ms. Brown, chair of the Academic Affairs Committee,
for her report. The first action item ofthe committee was AACR 1, which lists a candidate for a
degree from the Summer Session of 2010. Ms. Brown moved acceptance of AACR 1. Mr.
Miles seconded her motion, and it passed without dissent. (See AACR 1 at the end of the
L. Candidates for Degree — Bluegrass Community and Technical College (AACR 2)
Ms. Brown said that the approval requested in AACR 2 may be the last under the 2004
agreement among the University of Kentucky, the Kentucky Community and Technical College
System, and Lexington Community College pursuant to House Joint Resolution 214. The
agreement states that LCC students who were or are officially enrolled on or before September

2004 in associate degree programs approved by the UK Board of Trustees and who complete the
associate degree program on or before August 31, 2010 shall have their degrees conferred by the
UK Board of Trustees. She moved approval of AACR 2. Dr. Brockman asked for a second,
which was given by Mr. Dawson. AACR 2 passed with no dissent. (See AACR 2 at the end of
the Minutes.)
M. Audit Subcommittee Report
Dr. Brockman asked Mr. Stuckert to give the report ofthe Audit Subcommittee. Mr.
Stuckert, chair of the Finance Committee, under which the Audit group is a subcommittee,
reported that the Audit Subcommittee met that moming. The subcommittee discussed the
auditing comments and statements for the fiscal year ending June 2011 as contained in the pre-
audit report provided by BKD. They retained BKD LLP, the university’s auditor, as a
continuation of a five-year contract that was initiated in 2008. Joe Reed, senior director of
Intemal Audit, proposed revisions to the Audit Subcommittee charter and to the Intemal Audit
charter, both of which were accepted by the Audit Subcommittee.
N. Finance Committee Report
Mr. Stuckert reported that the committee considered three resolutions at that moming’s
meeting after discussing each one thoroughly.
O. Acceptance of Interim Financial Report for the University of Kentucky for the Six
Months Ended December 31 2010 (FCR 1 )
Ms. Angie Martin, Vice President, Office ofthe Treasurer, explained the financials and
reviewed assets and liabilities found in the attachment to FCR 1. Mr. Stuckert invited specific
questions about the content ofthe report, then moved approval of FCR 1. Mr. Shoop seconded
his motion, and there was no opposition to its adoption. (See FCR 1 at the end ofthe Minutes.)
P. A Resolution Providing for the Authorization Issuance and Sale of
Approximately $19,000,000 General Receipts Obligations (Upgrade Student Center
Infrastructure) of the University of Kentucky Pursuant to the Trust Agreement Dated as of
November 1 2005 {FCR 2)
Mr. Stuckert stated that the substance of FCR 2 was approved, in effect, at the last board
meeting, and this resolution is a specification of terrns involved in the issuance ofthe municipal
bonds. He made it clear that although FCR 2 states that "The Upgrade Student Center
Infrastructure Project will not result in an increase in tuition,” upon subsequent questioning the
Finance Committee found that such an increase would be incurred. As a result, Student
Govemment on behalf ofthe students voted that a $24 per student per semester fee would be
initiated to cover the cost of this expansion. Mr. Stuckert moved approval of FCR 2. Mr. Smith
seconded the motion. It passed without dissent. (See FCR 2 at the end of the Minutes.)

Q. Data Center Infonnation Technology Equipment — Hospital { FCR 3)
Mr. Stuckert said that FCR 3 funds the facility approved at the board of trustees meeting
on February 22. This FCR covers the hardware for servers, network storage, and security
components for the immediate capacity needs of our hospital. Mr. Stuckert moved approval of
FCR 3. Mr. Shoop seconded his motion, and it carried without dissent. (See FCR 3 at the end of
the Minutes.)
R. Investment Committee Report
Mr. Roberts gave the Investment Committee Report in the absence of Mr. Gatton, chair
ofthe Committee.
The Investment Committee met on March 28 to review perfonnance results and conduct
other business. The Endowment had a net market value of $882.5 million as of February 28,
2011. For the seven months ended February 28, the Endowment pool retumed 17.2 percent,
which is in line with the policy benchmark return of 17.3 percent.
The committee heard an update on the newly established Endowment Advisory Group.
At its September 2010 meeting, the Investment Committee approved changes to the University’s
Endowment Investment Policy. Among other things, the committee established the Endowment
Advisory Group, made up of senior administrators and faculty appointed by the President, to
advise the Vice President for Financial Operations and Treasurer on matters related to the
management of individual endowment funds. The Group reviewed spending on underwater
endowments, which are endowments whose market value is below the contributed value. While
the Endowment has experienced a strong recovery, UK still has some individual endowment
funds that are under water. The Endowment Advisory Group recommended that, effective for
Fiscal Year 2011-12, spending distributions be reduced by 25 percent for endowments under
water more than 10 percent. This will impact 298 ofthe 1,971 endowment funds. Distributions
from those 298 funds are expected to be reduced by $1.1 million to $3.4 million. The
Endowment Advisory Group also reviewed minimum endowment levels and recommended new
levels to the administration which are under consideration.
The Investment Committee also reviewed results of the 2010 NACUBO-Commonfund
Study of Endowments released in late January. NACUBO stands for National Association of
College and University Business Officers. Of the 865 public and independent institutions that
reported their endowment values as of June 30, 2010, UK ranked 84 (or in the top 10 percent).
The average retum of participating institutions was 11.9 percent for the year ended June 30,
2010. UK eamed 13.1 percent during the same period due to a higher than average equity
allocation. UK has gradually reduced its equity exposure over the last 18 months, increasing the
allocation to absolute retum and other altemative strategies in an effort to reduce volatility of
retums. The Committee reviewed a benchmarking summary of 2010 retum and asset allocation
data for the Top 20 institutions. The University’s target asset allocation is in line with the
average allocation of those institutions.

The committee also heard an update on the Endowment’s private equity allocation, which
is currently 4 percent ofthe total endowment pool. UK will be making significant commitments
to the private equity asset class over the next few years in order to reach and maintain the 7
percent target allocation. Investment staff will soon issue a Request for Proposals for a new
private equity manager. All investment managers must be hired through an RFP process under
the supervision ofthe university’s Purchasing Division.
Dr. Brockrnan thanked Mr. Roberts for his report and asked for the Student Affairs
Committee Report from Ms. Patterson.
S. Student Affairs Committee Report
Ms. Patterson, chair ofthe Student Affairs Committee, reported a successful moming
meeting. It was decided that future committee meetings will showcase a student as a speaker at
each meeting beginning in June.
DanceBlue Overall Chair Matt Dempsey gave the history of how the fundraiser was
started. Jared Mynear was diagnosed with cancer at an early age and died at the age of 13. His
mother wanted to create a legacy to honor him and the Pediatric Oncology Clinic. With the help
ofthe Office of Development, they raised funds to renovate a clinic. To maintain the legacy, UK
modeled a fundraising program after a successful one at Penn State called THON that has been
active for 35 years and has raised $78 million.
Thus far, DanceBlue funding has provided social work personnel, a clinic, salary support
for neurocognitive testing of patients, and a laboratory for research in pediatric oncology in the
Markey Cancer Center. The students have raised $2.9 million in six years.
DanceBlue is now reaching out to high schools in the area and eventually across the state,
encouraging them to provide their own marathon, a program which has been successful at
Indiana University. Money from high school events will be added to the UK total. There were
82 DanceBlue teams this year. It is planned that alumni will take on some high school initiatives
Ms Patterson also mentioned that Student Govemment Association elections are
Wednesday and Thursday, and another route is expected to be added to the recently initiated Cats
Cruiser service.
T. University Health Care Committee Report
Ms. Young, chair of the University Health Care Committee, gave its report .
At the moming’s meeting, Mr. Murray Clark and Ms. Ann Smith presented the building
projects update. Pavilion A patient floors and public spaces will open Thursday, May 19, 2011.
These spaces will include the 305-seat auditorium, the coffee shop, the chapel, conference
rooms, and public and surgical waiting rooms. On Sunday, May 22, 2011, two patient care
floors will open for patients in neuroscience, ICU, pulmonology, stroke, trauma, general surgery,

orthopedics, abdominal transplant ICU, and rehab spaces. With the opening of Pavilion A,
Chandler Hospital will have a potential maximum capacity for 568 beds, including 98 critical
care beds.
There are still a number of remaining elements of Phase I that have yet to be completed
and will come on line in planned phases. Into the future, the construction phases under
prioritized consideration include the need for 24 additional ICU beds, complete privatization of
all rooms, and the redesign and modemization of equipment for a new kitchen.
The project is still under budget.
Mr. Sergio Melgar presented the financial report comparing the balance sheet at January
in fiscal year 2011 with fiscal year 2010. Cash decreased $117.7 million. The $51.3 million
balance is $30 million lower than the December 31, 2010 balance. The decrease from 2010 is
due to the use of cash reserves for the remainder of Phase I-A ofthe Patient Care Facility
Proj ect. Accounts receivable have decreased by $1 million compared to last year, or $103.5
million versus $104.5 million, and net patient service revenue increased $27.5 million. The
value of board-designated investments now totals $203.6 million, which is a $24.5 million
increase from January of last year. Net capital assets have increased $134.7 million due to the
planning for the patient care towers, the groundwork on the new site, and the construction of the
patient care facility. Accounts payable have decreased $3.6 million, net assets have increased to
$616.6 million from January 2010, and total assets are at $1.2 billion. UK hospital system
posted an operating profit of $1.2 million in January. Year-to-date income from operations is
$18.4 million, which is $5.8 million less than budget and $8.1 million less than the prior year.
There is continued concem about an increasing volume of bad debt, which is almost twice what
it was last year. Current month investment income is $2.6 million, and year-to-date investment
income is $28.9 million.
Mr. Melgar also gave a very brief financial overview for the months of February and
March, which have not quite closed yet. Overall, volumes are up. February was a break-even
month, and for the quarter, the numbers are fairly positive compared to last year, where the
system lost money.
Dr. Richard Lofgren presented a UK HealthCare Enterprise perfonnance update,
reporting that quality and outcome scores continue to be strong. Patient satisfaction has
improved in the last quarter. The efficiency metrics are near target, with the increase in labor
costs reflecting the combined effects of seasonality and preparation for the opening ofthe new
facilities. Compliance with Medicare 4 measures is strong. However, a handful of specific
metrics are still commanding some special attention. The stroke unit received the gold plus
recognition from the American Heart and Stroke Associations for its perfonnance on stroke
guidelines. And finally, mortality scores have declined significantly for the past six months, as
have nursing vacancy and tumover rates.
The committee had two action items. Dr. Kevin Nelson presented for approval the
privileges and credentials for Chandler and Good Samaritan Hospitals. The committee made a
motion, and all privileges and credentials were approved. Upon the recommendation ofthe

medical staff operating subcommittee at both Chandler and Good Samaritan Hospitals, the
hospital committee voted to approve the extension of all clinical privileges granted at University
of Kentucky Hospital and Chandler Hospital to include the same clinical privileges at UK
HealthCare Good Samaritan Hospital.
Dr. Brockman asked for any questions about the Health Care report. Ms. Curris
questioned the relationship between FCR 3 and a statement about cash balances in the report.
Mr. Melgar explained what appeared to be a contradiction in the two documents.
Dr. Brockman then asked Ms. May for her report for the University Relations Committee.
U. Proposed Revision to Goveming Regulation: Govemance ofthe University of
Kentucky — Petitions to Address the Board of Trustees (URCR lg
Ms. May, chair ofthe University Relations Committee, reported that the committee met
during the moming and approved the second reading of URC