Budget/Finance Committee Meeting

October 21, 2005

Regents Present: Maggie Warren, chair, Nancy Paul, Blanche Parks, Ben Blair, Bob Storey, Karen Lee

Regent Present by Teleconference: Jim Roth

Staff Present: Jerry Farley, Wanda Hill, Al Dickes, Tom Ellis, Ron Wasserstein, Chris Leach, Rhonda Thornburgh

Minutes of the June 15, 2005 meeting -

Regent Blair asked that the minutes be clarified to show his comment regarding the University's ability to operate with so few new employees was in reference to maintenance and landscaping employees only.

Minutes were approved as amended.

Quarterly report for period ended September 30, 2005 -

Vice President Hill reviewed the quarterly report. She noted last year's sales tax receipts were at record levels, while receipts since April 2005 have returned to more normal levels. Sales tax for August and September of this year are estimates since we are on a two month lag. Revenues and expenses are tracking with last year's figures.

Regent Lee asked about the drop in auxiliary revenues. President Farley explained we are currently under the projected occupancy in the Living Learning Center. The LLC is primarily a freshman facility and the number of freshmen is down this year. Mr. Monical and Mr. Dickes will make a presentation on enrollment at the November board meeting.

RFP process and evaluation criteria for Financial Advisor, Bond Counsel, and Underwriter -

The evaluation was referred back to the Committee after the RFP for Financial Advisor and Bond Counsel was put on hold at the June 17 Board meeting.

President Farley indicated the administration would like some guidance from the Board on how to approach the process and how proposals should be judged and evaluated.

Regent Warren said one of the concerns was choosing an out of town firm, however, in a town this size there is always the potential for conflicts of interest.

President Farley said the RFPs were sent to a broad list and those responding are shown in the material provided. He indicated if restrictions are made they need to be done up front.

Regent Lee said the bid should be awarded to the best firm for the job and not restricted to someone in the area.

Regent Paul said the Bond Counsel should answer to the Board, or a subcommittee of the Board, and perhaps personal interviews should be conducted.

Regent Storey indicated all of the firms submitting proposals are qualified, but they should be interviewed to aid in the selection process.

Regent Roth asked why the Board should be involved in this selection process and not be involved in the selection of a contractor hired for a twenty million dollar construction project. He said the Board needs to let the administration know the criteria involved and then rely on the staff to do their jobs. Regent Blair agreed it is a staff responsibility to make the selection for recommendation of Board approval. He said, however, if someone on the Board has expertise in the area involved, it would be wise to make use of their expertise.

Regent Lee asked about the process used in scoring the proposals. President Farley said it was a very subjective evaluation. Vice President Hill said the selection committee rated the firms individually and then got together to discuss and review their evaluations.

Regent Warren suggested the Board not be a part of the committee, as such, but provide input to the committee on their experience with the firms making proposals.

Regent Blair said the normal procedure for selection should be for the Board to come up with the criteria, the administration provide a recommendation to review with the Board, and the final decision from the Board. He indicated the selection of the auditor, which required Board involvement, was in a category by itself.

Regent Storey asked if the administration felt interviews are necessary. Vice President Hill said when the committee originally reviewed the proposals they felt comfortable in making a recommendation without having interviews. It will be necessary to see if the previous bidders are willing to stand by the original bids.

Regent Roth said we need to rely on the administration to do their jobs.

Regent Storey said he didn't feel anything needed to be added to the scope of selection criteria. He suggested giving the administration full authority to proceed with making a recommendation to the Board.

Regent Blair suggested personal interviews be considered in the selection process.

Regent Roth said a decision on underwriter selection should be put off until a financial advisor is hired.

Vice President Hill said the financial advisor originally recommended was Springstead. The selection committee liked Springstead's approach and the depth of analyses they provide. Springstead does not provide any underwriting and they can assist the University in choosing an underwriter based on the type of bond being issued.

Regent Paul said we may want to schedule interviews with the top two candidates.

Regent Warren said she felt strongly about having a financial advisor who is not also our underwriter.

It was moved and seconded to authorize the staff to evaluate financial advisor proposals, interview the top two contenders, and make a recommendation to the Board. Motion carried.

Vice President Hill noted we will need to check with the firms who made proposals to see if they would honor the earlier proposals.

It was moved and seconded to hold off on selection of an underwriter until after the Financial Advisor is hired. Motion carried.

Next meeting -

The next committee meeting will be scheduled during the second week in December. An update on the Financial Advisor selection will be given at the meeting.

Meeting was adjourned.

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