Chairman Whitehead Called on Vice President for Administration Bill Morris
MINUTES OF THE MEETING OF THE STATE BOARD OF TRUSTEES
IVYTECHCOMMUNITY COLLEGE OF INDIANA
SOUTH BEND, INDIANA
OCTOBER 9, 2008
Chairman Kaye H. Whitehead called the October 9, 2008, regular meeting of the State Board of Trustees to order at 9:00 a.m. in Room 446 at the IvyTechCommunity College – Lawrenceburg Campus, 50 Walnut Street, Lawrenceburg, Indiana.
A.ROLL CALL:
Assistant Secretary William F. Morris called the roll and the presence of a quorum was announced. The following State Trustees were present:
Ms. Kaye H. Whitehead, Chair
Mr. Lee J. Marchant, Vice Chair
Mrs. Anne K. Shane, Secretary (via phone)
Ms. Linda Buskirk
Ms. Leigh A. Duckwall
Mr. David M. Findlay
Ms. Lillian Sue Livers
Mr. Robert L. McCreary
Mr. Anthony J. Moravec
Mr. Norman E. “Ned” Pfau, Jr.
Ms. Linda E. White
Trustees unable to attend the meeting:
Ms. Martha E. Rivas-Ramos
Mr. Steve Schreckengast
Mr. V. Bruce Walkup
B.NOTICES OF MEETINGS MAILED AND POSTED:
Assistant Secretary William F. Morris confirmed that notices of the October 9, 2008, regular meeting were properly mailed and posted.
C.APPROVAL OF BOARD MINUTES:
Chairman Kaye H. Whitehead directed the trustees’ attention to the minutes of the August 14, 2008, regular board meeting. Trustee David M. Findlay made the motion to approve the minutes of the August 14, 2008, regular meeting as submitted. Trustee Linda Buskirk seconded the motion, and the motion was carried unanimously.
BOARD MINUTES
OCTOBER 9, 2008
D.COMMITTEE REPORTS:
Item 1Chairman Whitehead called on Vice President for Administration Bill Morris to present Resolution Number 2008-42. Vice President Morris explained that this resolution will bring the By-laws of the State Trustees of Ivy Tech Community College up to date. A variety of amendments made individuallyto the by-lawsby Board resolutions have not been incorporated into the Board’s official by-laws document. For example, the Board took action in 2007 to increase the President’s signature authority from $200,000 to $500,000; in 2008, the Board moved their annual meeting and election of officers from the second quarter of the year to the third quarter of the year; they increased the terms of officers of the State Board from one to two years; they changed the membership of the Board’s Executive Committee to include the three elected officers and the chairpersons of the four permanent committees of the Board. In addition, the Board by resolution has approved a code of conduct and a conflict of interest, which have also been incorporated into the by-laws. The authority to delegate duties to the president has also been included in these by-laws. These amended by-laws represent the compilation of the previously approved amendments into these new by-laws. Trustee Linda Buskirk made the motion to approve Resolution Number 2008-42, Approval of Amended and Restated By-laws of the State Board of Trustees, and Trustee Ned Pfau seconded the motion. Senior Vice President and General Counsel Susan Brooks noted for the record that two thirds of the trustees were present as required by the by-laws to change the by-laws. The motion carried unanimously.
Item 2Chairman Whitehead called upon Trustee Norman E. Pfau, Jr. for the Budget and Finance Committee Report. Trustee Pfau reported that there were no action items to bring before the Board. He reported that the committee met yesterday and discussed the $65 million Series L bond issue, the College’s investment policy, and the enterprise data warehouse with the Banner system.
Item 3Chairman Whitehead called on Trustee Linda Buskirk for the Planning and Education Committee Report. Trustee Buskirk reported that there were no action items to bring before the Board. She reported that the committee heard the enrollment report; and about some processing issues that arose during the enrollment process and how those are being addressed. The committee received an update on information technology and update on the nursing program, and logistics and supply chain management. They also received information on an opportunity for the College to help those on food stamps and on surveys of employers of Ivy Tech graduates. Chairman Whitehead added that report was very intense and covered a lot of information in a short period of time. She commended the committee—they have come to the table quite prepared. Trustee Buskirk thanked Provost Don Doucette and his team.
Item 4Chairman Whitehead called on Trustee Anthony J. Moravec to give the Buildings, Grounds, and Capital Committee Report. Trustee Moravec reminded the trustees of the detailed discussions of the following resolutions during the committee meetings the previous afternoon and moved for the approval of:
Resolution Number 2008-43, Approval of a Lease Agreement for the Culinary Arts and HospitalityAdministrationCenter in Indianapolis, Region 8/Central Indiana
Trustee Pfau seconded the motion to approve Resolution Number 2008-43, and the motion carried unanimously.
Resolution Number 2008-44, Approval of a Lease Agreement for the Warsaw Orthopedic and Advanced ManufacturingTrainingCenter, Region 2/North Central
Trustee Leigh A. Duckwall seconded the motion to approve Resolution Number 2008-44. Trustee Findlay said that on Resolution 2008-44 relating to the Warsaw facility, the developer that has been awarded the contract happens to be a client of his bank, and they are involved in the financing of this project. He asked if he should abstain in the voting in this matter, and said that he is not involved in the process, but he wants to make sure there is no conflict. Senior Vice President Brooks said he should abstain and the record should reflect his abstention. The motion carried unanimously, with Trustee Findlay abstaining.
Resolution Number 2008-46, Approval of an Architectural Firm for the Multimodal Project, Region 8/Central Indiana
Trustee Lillian Sue Livers seconded the motion to approve Resolution Number 2008-46, and the motion carried unanimously.
At this time during the regular meeting, Chairman Whitehead called a public hearing for the consideration and awarding of a public works contract. Trustee Moravec made the motion to approve Resolution Number 2008-47 for the awarding of a build-to-suit with a purchase agreement contract for the Elkhart new campus project in Elkhart. Trustee Livers seconded the motion. Chairman Whitehead asked if anyone in attendance had anything to present to the Board regarding this Resolution or any questions about this resolution, and no one came forward. Chairman Whitehead called for a vote to approve Resolution Number 2008-47, Approval of a Build-to-Suit with a Purchase Agreement Contract for the Elkhart New Campus Project, Region 2/North Central, and the motion carried unanimously. The hearing was then closed.
Trustee Moravec made the motion to approve Resolution Number 2008-45, Approval to Lease the Former St. Vincent Property in Indianapolis to a Private Developer to Convert the Building to Student Housing, Region 8/Central Indiana. Trustee Findlay seconded the motion, and the motion carried unanimously.
Trustee Moravec reported that the committee also discussed Fort Wayne’s request to use change orders to increase the size of the technology center that is currently under construction to house the automotive and autobody program. This will be an action item at the December Board meeting.
Item 5Chairman Whitehead called upon Trustee David M. Findlay to give the Audit Committee Report. Trustee Findlay reported that there were no action items to bring before the Board. He reported that the Audit Committee discussed the matter of keeping minutes of the Audit Committee meetings, and under the advisement and guidance of General Counsel, the Committee will not keep formal minutes of the Committee meetings. The Audit Committee Chairman’s report to the entire State Board will constitute the minutes. Trustee Findlay said that they also reviewed the standing audit agenda, which is done on an annual basis. They also reviewed and discussed the audit committee charter and no changes were made or suggested. They reviewed and discussed the internal audit department charter and requested that Executive Director for Internal Audit Ben Burton amend the charter to emphasizethat the advisory and consulting roles have become more critical to the internal audit function within the College. They reviewed the internal audit mission statement, which will correspond with the charter once the advisory and consulting services are added to it. They asked Mr. Burton to review the internal audit staff for the benefit of a new state trustee on the Audit Committee. Mr. Burton provided the background and experience for each member of the audit department so the Audit Committee would have comfort with their skill set. They also reviewed the Institute of Internal Auditors definition of insurance reviews and consulting engagements to ensure that nothing that the internal audit group would do with respect to consulting and advisory services would be in conflict. They reviewed the status of the 2008-09 audit schedule, and as the chancellors and finance staff are well aware, each of the 14 regions are going have an internal audit this year of the Banner finance system, which will be the first internal audit. This project has gotten the internal audit group slightly behind their calendar schedule in audits, but upon discussion with the College’s finance staff, the process is going well. They received an update on SAS 114 which is the Audit Committee’s communication with the State Board of Accounts. They discussed the internal audit reports that each member of the Committee received from Mr. Burton’s staff. They discussed management letters as another tier of advisory activities that goes on between internal audit and the regional staff. They advised internal audit staff that the Audit Committee did not need to receive those management letters. However, if there is a trend with broader issues that arise as they go through that process, then the Committee should be made aware.
Item 6In the absence of Trustee Anne K. Shane, Chairman Whitehead called on Senior Vice President for Workforce and Economic Development Susan Brooks for a report on the activities of the Workforce and Economic Development Committee. Senior Vice President Brooks reported that there were no action items to bring before the Board. She said that she has received the report from Crowe Horwath (formerly Crowe Chizek) on the work that they did on behalf of the WED departments around the College. Crowe Horwath has identified common business practices and business processes that they recommend the College use in the future. Senior Vice President Brooks reported that there was much disparity among the regions and it is necessary for the WED departments to become uniform in these processes in order to supportthe new IT system and begin online registration. The WED directors, the chancellors, and the executive directors of finance will all receive theCrowe Horwath presentation and recommendations at the end of the month, and we will begin implementing their recommendations. Senior Vice President Brooks reminded the trustees that the College was a recipient of a $1 million grant from the Joyce Foundation and announced that the second round of funding is going to be offered by the Joyce Foundation by the end of the year. She reported that her staff is in the process of working with our partners to determine what the State of Indiana will be requesting with respect to the $1 million grant. The committee also had an update on the rapid response dollars that the College has received from the Department of Workforce Development. The College received a $7 million grant to assist in working with displaced workers when companies go out of business. As an example, the College has recently worked with 2,500 dislocated workers in the Elkhart area, and more than 450 individuals have found their way to the College to register for classes or training. The committee heard a presentation from Randy Johann, WED Director for the Southeast Region, regarding efforts that are underway for Lawrenceburg and Madison. They also heard a discussion regarding the College’s involvement with Eco15, which is a grant by the Lilly Endowment to 10 counties ranging from the Columbus area to Lawrenceburg area to try to promote advanced manufacturing, the healthcare industry, hospitality and tourism.
Item 7Chairman Whitehead called on Trustee Lee J. Marchant for a report from the Regional Board Engagement Committee. On behalf of the Committee, Trustee Marchant introduced Resolution Number 2008-48, Resolution to Reappoint Regional Trustees Whose Terms Have Expired. Trustee Marchant explained that the terms of terms of appointment for certain regional trustees identified in the attachment to the resolution have expired and that it is important to insure the continuity of the boards with these trustees who are serving with expired terms. Trustee Marchant explained that, with this resolution, those regional trustees listed on the attachment shall be reappointed as trustees for their respective regions for three-year terms beginning on July 1 after the expiration date of their previous appointment and that future appointments and reappointments will be suspended until the State Board Regional Engagement Committee has completed its study of the duties, roles, expectations and terms of regional trustees and the State Board has acted upon their recommendations. Trustee Marchant moved to approve Resolution Number 2008-48,and Trustee Livers seconded the motion. The motion carried unanimously.
E.TREASURER’S REPORT:
Chairman Whitehead called on Bob Holmes, Vice President for Finance and Treasurer, for the Treasurer’s Report.
- Bob Holmes reported that we have completed the first quarter of the new 2008-09 fiscal year. Through September, total revenues have increased by nearly $8 million over the same period a year ago. Growth in student fee revenue accounts for the greatest portion of this increase, about $6.6 million, as compared to 2007-08. State appropriations have increased by $1.6 million at this point over last year. We expect this increase to grow larger throughout the year as additional debt service payments are made and the state’s fee replacement appropriations are released. Other revenue is down by about $500,000 compared to last year, primarily resulting from lower investment income. Higher investment balances have been offset by a reduction in the average interest rates that our portfolio has earned, about 1.5 percent lower this year as compared to September 2007. The Commission for Higher Education approved the College’s request for the third and final portion of the payment delay funds that the State withheld from all public higher education institutions since 2001-02. The total amount withheld from all public higher education institutions was about $100 million, of which Ivy Tech’s share was $10.6 million. The College received $4.6 million in 2006-07, $3 million in 2007-08, and with the final $3 million scheduled for payment this year, we will be caught up. The General Assembly required that these funds be used for general R&R projects. We have submitted our list of projects to the Budget Committee and the CHE, and the CHE has approved them. We are hopeful that this item will be on the next state budget committee agenda. Total expenditures as of the end of September in the operations fund have increased by $2.8 million over last year. Salaries and benefits make up more than the entire increase, as they have increased by $5 million. Other expenses such as supplies, equipment, utilities, leases, transfers, and other expenses are actually down by $2.2 million compared to last year. Part of this savings is a timing issue which will be caught up in the next couple of months. However, even taking that into account, there is still a positive differential in comparing the increase in revenue versus the increase in expenses. Over the last year, the College added 62 new full-time faculty members; in the past five years, the number of full-time faculty has increased by 250. While it is difficult to keep up with the enrollment increases over the last few years, the College has made significant investments in faculty. Vice President Holmes called for questions. Trustee Linda E. White asked who oversees the investment portfolio, and Vice President Holmes said that this Board has responsibility for adopting the policy and the Treasurer has responsibility for implementing the policy. He said that the current investment policy was reviewed with the Board yesterday during the Budget and Finance Committee meeting. He said that the College has a pretty conservative policy. We have the authority to invest in certificates of deposit, treasuries, agencies, and commercial paper with certain restrictions, and money market accounts. Currently, our investment portfolio does not include any commercial paper, and we have not invested in the Common Fund, compared to about 900 other colleges across the country have, so we are very fortunate in that regard. Vice President Holmes said that he had as one of his goals this year to review the investment policy, but little did he know that the economy would be in the situation it is today. He received input and suggestions on our investment policy yesterday, and he plans to come back with minor revisions to the policy either in December or February for the Board’s consideration. Trustee Pfau directed Trustee White to pages 55 and 56 in the Board booklet which notes the statement of the College’s investment policy. He said that at the present time, our excess cash is conservatively invested, and the trustees made some recommendations on our policy to Vice President Holmes. One recommendation Trustee Pfau noted is that, CDs at present do not exceed 30 percent with any one given institution, and the trustees discussed reducing that 30 percent to 20 percent. In addition, he noted that the College does not have funds invested in the Common Fund. Trustee White said that that was actually the comment that generated the question, and Trustee Pfau reiterated Vice President Holmes’ comment from earlier that the College does not have any money in the Common Fund. Vice President Holmes said that there is a large number of colleges and universities and non-profit organizations that have invested in the Common Fund, which is unfortunate. He said that the Common Fund was set up with the best of intentions. Trustee Pfau added that Vice President Holmes has done a good job with the College’s investments. Chairman Whitehead called for a motion to approve the Treasurer’s Report. Trustee Findlaymade the motion to approve the Treasurer’s Report, and Trustee White seconded the motion. The motion carried unanimously.
F.STATE OF THE COLLEGE: