Board Meeting of the USTAR Governing Authority
02-04-2016 Meeting Minutes
GA Members: Greg Bell, David Damschen, Rich Lunsford, Derek Miller, Susan Opp, Will West, and Val Hale
Excused: Jennifer Hwu and Richard Kendell
USTAR: Cherie Anderson, Justin Berry, Linda Cabrales, Mary Cardon, Lincoln Clark, Jared Goodspeed, Elenor Heyborne, Jillian Hunt, Peter Jay, Joe Kusluch, Scott Marland, Jinny Mcgavien, Teresa McKnight, Donna Milakovic, Koa Perlac, Shirlayne Quayle, Andrew Sweeney, Thom Williams
Other: Andy Buffmire (UofU), Noelle Cockett (USU), Corrine Garcia (UofU), Greg Jones (UofU), Chris Pieper (AG office),
Mr. Bell: Ladies and gentlemen thank you for coming today. We will start our meeting. We appreciate your attendance. The first order of business, Ivy Estabrooke is in another meeting she couldn’t get out of and will be here as the meeting progresses. We would like to welcome our governing board members. We should have Jennifer Hwu calling in soon.
Mr. Miller: If I hear something I’ll let you know.
Mr. Bell: Will you monitor that Derek. We have the minutes before us and I would like to take a motion on that.
Mr. Miller: Motion to accept.
Mr. Bell: We have a motion to accept the minutes of January 7th, discussion. All in favor aye?
USTAR GA Members: aye
Mr. Bell: Oppose, nay? The motion carries unanimously. Lets discuss, we will have our assistant director, Thom, talk us through the discussion of what makes a Utah based company.
Mr. Williams: Thank you, sir. This issue came up a couple weeks ago; I know we have probably tripped across it before. We have a company you will see later on in some of the financial slides that we’re going to show that we will vote on. A company that is based largely in Massachusetts but they have a little bit of a presence here. I know that the subcommittee, commercialization subcommittee, governs just a little bit and causes us to go back and review what our policies are more exactly, in regards to what constitutes a Utah based company and that would be eligible for USTAR funding. At the moment we have got this. I’m just going to say at this point, I think we want to make sure that we are leveraging whatever language the state currently has but I am not sure we captured all of it quite yet. We are probably going to launder this a little bit more, present it to the subcommittee and finalize and vote on it.
Mr. Bell: Is “in-state entity” a statutory term?
Mr. Williams: I’m not sure. But I would think that other programs that have requested funds from the state would have to have proof that they are in the state or coming to the state. So, we would like to explore this one a little bit more.
Mr. Lunsford: What if they have a satellite? You have a comparative company that has a component of…
Williams: The word that a lot of statute language uses is a substantial presence and that could be a little subjective but this is what we have and I think we are on the right path.
Bell: We have two examples.
Williams: Exactly, BD medical and another like that. I just want to make sure if there is some other language that addresses in-state residence or in-state presence that we are using. So that as a state agency or a state entity we are using the same thing and I’m not sure we have captured that quite yet. But I think this is where we are going to end up in regards to them having their primary place of business here in Utah, or after a certain period of time they agree that they are going to relocate to Utah or repay whatever funds were given. But we will make the language much more precise and present that.
Miller: I don’t imagine, Thom, a quick phone call to the division of corporations ought to get this settled pretty quick, because they have to deal with this on a legal basis everyday. I don’t know what the definition is that they use but I’m sure that they have got one. It doesn’t necessarily mean we can adopt the whole cloth. But it would certainly inform us.
Williams: We had this in the slide deck but I just wanted to make sure that we are running counter any other state agencies.
Bell: The other thing though is the question Rich phrases is very germane for instance, GOED gives allowances and credits to companies that are not literally Utah companies but are bringing a big presence here.
West: But those are not going to be the same things that we are generally thinking about. Their definition actually might be different than ours.
Williams: It could be different but our first step will be to walk down the hall to make sure.
Bell: But we may well be in a situation funding a research by a corporation who is not a Utah corporation in the legal sense but has a significant presence here whose research we want to incentivize. So I would appreciate further study on that.
Williams: The next several slides are financial adjustment slides that we are going to request that you vote on. So, I would ask Lincoln to walk us through some of these.
Clark: The budget subcommittee met about two weeks ago. So you are all aware that is Ron Mika, Rich Lunsford, and Susan Opp. We are going to go through some requests and modification to the current budget both for USU, the UofU, industry partnerships, and the TOIP program. As a reminder the total appropriation for the research line is 18.5 million and to date the funding approved to Utah State for fiscal year 16 is 7.7 million and we have that reminder that approximately 1.4 million in non-lapsing funds that have been set aside to bring down the start up. Reflecting the 6.4 million and the value for the year is 11.6 million.
Bell: What does that mean in terms of this 6.4 and 11.6 so that leaves the 435.
Clark: Correct, That is unallocated.
Bell: So Utah State is not going to be seeking anymore funding. It’s just that we are offsetting the non-lapsing.
Clark: Here are the first sets of requests from the University of Utah. Looking at Masood, the budget subcommittee.
Bell: Is this the current year?
Clark: Correct, fiscal year 16. All of these requests and adjustments will be for fiscal year 16. He had additional requests of $10,000; the subcommittee recommended not to approve that along with the lean canvas cohorts of approximately $230k and the MRI imaging system of $1 million. The thought on some of those as we get to evaluating the progress to date versus the funding available, we will then reevaluate those items and a couple others that we will get to. I just want to pause and point out Pointspectrum. There is an interesting discussion on that; the commercialization level on that is subtractive and is worth noting until it has contributed money to that project but the budget subcommittee is going to revisit that at a later date.
Williams: So this was, to illustrate a little further, this is the company we were talking about earlier, about their presence in Utah. As Lincoln had mentioned, we like the technology, its something that I believe we want to fund but we want to run down the presence in Utah aspect of it. It’s the Pointspectrum.
Clark: Moving next to the translational Center for Cell sheet regeneration medicine. Again do not approve, we will reevaluate at a later date. Moving on to the Center of Medical Innovation, the subcommittee took the same position. Look at the second set of requests for fiscal year 16 for University of Utah. The first item is the Center of Engineering Innovation, no approval there. The entrepreneurial post docs, the request was $50k and no approval. The nanofab equipment donation of $100k, do not approve. And for Saffarian, $7,000 dollar adjustment was largely clerical on our end. That is why that recommendation is put through to approve. And then the request that we received from the technology summit because it was indicated the amount could be reduced by 25k. The budget subcommittee recommended approving that reduction as well as reducing the approved amount to the TRAC team database of $187K. So when it is all said and done, the vote that the budget subcommittee is putting forth to the broader GA is to approve the University of Utah FY16 budget new requests and adjustments totaling a negative $241k. This concludes the University of Utah.
West: Is this just showing us the things that are not approved?
Opp: We looked at everything in the subcommittee and then we discussed it. And we are recommending to you to vote as the subcommittee voted.
Jones: I’m not sure I understand everything. The entrepreneurial post-docs… the request is actually to… So the budget approved on that is $512,000early and we were asking permission to spend that approved money on post-docs. We weren’t asking for additional $50,000, we were actually asking to spend that money if the post-docs were ready. So, I’m not quite sure I understand that.
Clark: I view that as a misunderstanding.
Opp: That’s not what we discussed in the subcommittee. Either the request was lost in translation or maybe Ivy misunderstood. We took it as a new money request. I didn’t see the original request so I cant explain why it was not understood.
Jones: So I think where we sit on that request is they and their advisors will present to you guys and so that’s still available if you guys approve their presentations, is that correct?
Opp: Yes, we certainly did not revoke approved budgets.
Bell: So, these are not turn down, we are just saying we need more information and consideration.
Opp: I’d say in that specific example it was a misunderstanding and so, well, yes we need to see those briefings. Our intention was not to un-approve the line item in a sense. Can you go up a slide?
Jones: So on the lean canvas, the MRI system, we had actually knocked the MRI system down to $325,000 dollar request. Pointspectrum is fine.
Bell: How should we leave?
Jones: Massood’s fine.
Opp: So I think the issue is that we only have $431k left to allocate and in the face of all of these we told they were all uppers. I know that is not correct. The point is we don’t have the budget to be able to cover the uppers at this moment.
Jones: Actually, what we did is reduce CMI and CEI budgets over our original requests to make room for the Translation Sheet. The thing I need to clarify for people and I will talk to them when I get back to the U. So the Center of Medical Innovation and the Center of Engineering Innovation no funding in FY16 for them, is that right?
Opp: I believe that is correct at this moment.
Jones: At this moment, If I need to give them a way to get possible funding, what would I tell them?
Opp: Right and so there are two main issues. We only have 400 and some thousand dollars left to allocate at the current run rate. And so you would have to pick from those funds and then the request that would come in would have to be reviewed by the subcommittee and approved.
Bell: Didn’t we reduce this though? Isn’t there another net $200k?
Williams: I think we have seen the same requests multiple times.
Opp: Yes, that does wind up adding $204,000 to the $430,000 or so that is left to allocate. I don’t really understand what happened before the subcommittee meeting. But everything we looked at in that subcommittee meeting had been pre-looked by Ivy and Thom. We didn’t look at project slides individually. That may be what I would recommend.
Bell: You’re making allocation decisions really.
West: Can I just ask a process question? Because one would look at this and think they are on two different planets, the two groups. Do you have no visibility as to what is remaining to be allocated when you make a recommendation?
Opp: He has full visibility.
Jones: Not what is left per say on an ongoing budget.
Opp: We talk about what’s left in the budget.
Jones: What we are pinning this off of is the original budget we put in and these were items that were still in consideration.
Opp: Right.
Jones: And so we added items and reduced the items that were in consideration and so I don’t even need to know what’s left in allocation wise. That’s USTAR’s deal. I just need to be able to give.
Opp: I just think it helpful to understand.
West: It shows that you are disconnected. If you are presenting $2.4 million worth of recommendations and there is $400,000 to allocate the answer is mostly going to be no.
Opp: I think he knows that and the committee knows that also. So it’s not a lack of transparency.
Williams: Perhaps, we could ask you to prioritize. Would that be helpful? Perhaps I should ask the subcommittee would that be helpful?
Opp: I think there are two things that are true, right? If you are asking for allocation of budget that we have already approved in the fiscal year process that needs to be known. And I know you know that. Secondly, of the new requests, prioritization would be helpful although we look at each one and we look at the business case on a case-by-case basis. I do think it is important to understand that if there is $600,000 dollars left, your fair share of that would be roughly half.
Jones: Not $2.4 million.
Opp: Right and I think that goes to Will’s point. On the other hand if I were in your shoes I am not sure I would request anything less just because we don’t have money left. Because there could be fall out money. Each time we look at the budget there puts and takes. The goal is to appropriately allocate the funding the best way we know on a real time basis.
Bell: We are on cusp of next year.
West: If that’s the case then why didn’t you allocate $400,000 instead of negative $200,000?
Opp: Because each of these requests did not get to our floor of business case good at our meeting. And I think we are also.