MINUTES OF THE FINANCE COMMITTEE
UNIVERSITY OF LOUISVILLE BOARD OF TRUSTEES

March 23, 2005

In Open Session

The Finance Committee of the University of Louisville Board of Trustees met on Wednesday, March 23, 2005, in the Jefferson Room of Grawemeyer Hall, Belknap Campus, with members present and absent as follows

I. Call to Order

Having determined a quorum present, Chair Pierce called the meeting to order at 2:00 p.m.

Approval of Minutes, January 13, 2005

Ms. Snowden made a motion, which Mr. McKinley seconded, to approve the
minutes of January 13, 2005. The motion passed unanimously.

II. Action Item: Approval of Endowment Matches

President Ramsey explained the endowment match requests for mission support will significantly enhance research and scholarship programs in Pan African Studies, Women’s Studies, and other disciplines that support the rich and diverse cultures contributing to the University. Vice President Curtin provided an overview of each request. Mr. Stone noted the chair in race, class, gender and sexuality presented a great opportunity for the University to conduct significant research regarding societal issues affecting the success of individuals in these categories. Ms. Snowden made a motion, which Mr. McKinley seconded, to approve the

President’s recommendation that the Board of Trustees approve the establishment of a new endowed fund for a Ph.D. Fellowship in Chemistry in the College of Arts and Sciences that will be funded from the Commonwealth’s Endowment Match Program; and

Authorize the Chair of the Board of Trustees to execute any documents required to complete the creation of this endowed fund.

President’s recommendation that the Board of Trustees approve the establishment of a new endowed fund for a fellowship in the College of Arts & Sciences; and

Authorize the Chair of the Board of Trustees to execute any documents required to complete the creation of this new endowed fund.

President’s recommendation that the Board of Trustees approve the establishment of a new endowed fund for two fellowships in the Speed School of Engineering that will be funded from the Commonwealth’s Endowment Match Program; and

Authorize the Chair of the Board of Trustees to execute any documents required to complete the creation of this new endowed fund.

The motion passed unanimously.

III. Action Item: Approval of Capital Construction Project College of Business &
Public Admin. Dean’s Suite

Vice President Owsley stated a commitment to reburbish the Dean’s Suite for Dean Moyer. Mr. Owsley noted funding was from private donations. Mr. McKinley made a motion, which Ms. Snowden seconded, to approve the

President’s recommendation to approve the following capital construction project:

The motion passed unanimously.

IV. Information Item: Interim Financial Statements for Period Ending
December 30, 2004

Vice President Curtin reviewed the Consolidated Statement of Net Assets for the period ending December 30, 2004 (copy available upon request). The University remains in a strong position, with assets of $782.5 million and net assets of $561.0 million. He noted decreases in cash and cash equivalents offset by increases in short-term investments and loans, accounts, and contributions receivable. Student receivables were 15% higher at December 31, 2004 as compared to December 31, 2003 due to increases in tuition and fees. With respect to noncurrent assets, decreases in restricted cash and cash equivalents were offset by increases in capital assets, as the restricted cash is used to fund construction and other capital expenditures. Mr. Curtin also reviewed the liabilities. Deferred revenue decreased $8.4 million due to changes in billing and recording procedures. Bonds and notes payable decreased $15.4 million in total due to normal payments of long term debt. He noted the University has not issued any new debt since December 31, 2003.

Mr. Curtin stated net assets increased $27.6 million over December 31, 2003. A breakdown of the $138.5 million in Unrestricted Net Assets (in millions) follows:

Vice President Curtin highlighted the following regarding the Statement of Revenues, Expenses, and Changes in Net Assets.

• The University recognized an increase in net assets of $57.2 million of the first six months of Fiscal Year 2005, as compared to a $47.8 million increase for the same time period of Fiscal Year 2004. This increase was due primarily to the decrease in total Operating Expenses of $8.3 million.

• With respect to operating revenues, Mr. Curtin noted tuition and fees revenue increased $12.4 million, or 14% due to increased tuition rates. Total grant revenue increased $5.5 million, or 13% due to a continued focus on research initiatives.

• Concerning operating expenses, Mr. Curtin noted increases in Instruction ($10.4 million) and Research ($8.2 million), Academic Support ($6.4 million) and Operation and maintenance in plant ($4.4 million). Some of this was due to differences in classification of programs in the two fiscal years.

Mr. Curtin highlighted the following concerning nonoperating revenues and expenses:

• State appropriations decreased $1.1 million

• Transfers from UofL Foundation decreased $4.9 million. During Fiscal Year 2004, $3.9 million was transferred from the Foundation for specific capital projects.

Chair Pierce thanked Vice President Curtin for his thorough overview of the financial statements and noted no action was required.

V. Information Item: Update on the Business Plan for Shelby Business &
Technology Park

Vice President Owsley distributed and discussed the following status report.

Status Report

Business Plan Action Items

Shelby Campus Master Plan: 2005-2010

The current planning focus includes the following university activities:

• continuing and professional education

• homeland security/national preparedness

• specialized research

The following action items address Goal 1:

Action Item 1:

Develop a Regional Computer Forensics Laboratory in Burhans Hall

a.) The university has been awarded a $2,968,400 grant by the
Department of Justice to construct and equip the laboratory

b) Select an architect by April 2005

c) Begin operation by January 2006

Action Item 2:

Develop the Center for Predictive Medicine

a) The university has applied to the National Institute of Allergies and
Infectious Diseases for a $22.2 million grant to build the Center

b) The federal funding will require a $13.0 million match by the
university

c) A decision on the federal competition is expected by

mid-2005

Action Item 3:

Develop a “Homeland Security” initiative relating to Shelby Campus

a) There are a significant number of current and

proposed “Homeland Security” activities at U of L in

general and Shelby Campus in particular

b) Develop a “Homeland Security” action plan by June 2005

for those activities that offer promise for development

at Shelby Campus

Action Item 4:

Develop a continuing and professional education plan to enhance the current activities at Shelby Campus significantly

a) Develop an action plan by June 2005 that:

1) evaluates the possibility of a conference center partnership

with the pending hotel development on the six-acre parcel

adjacent to the campus; and

2) evaluates the feasibility of expanding current offerings,

which should include consideration of the model of the

Metropolitan Education and Training Services (METS)

in Northern Kentucky

Action Item 5:

Explore other potential initiatives that might be appropriate for a core
“university presence” at Shelby Campus

a) Several university-related activities have been eliminated

after careful consideration

b) Continue to evaluate other academic/research initiatives that might
be appropriate for Shelby Campus

Action Item 6:

Evaluate the existing Shelby Campus facilities to determine what physical
changes are necessary to use them for the above activities

a) Hire an architect by May 2005 to begin the facilities review

Action Item 1:

Seek support for infrastructure development (currently ongoing)

a) Seek community support through participation in the District 18 Transportation Study

b) Obtain Transportation Cabinet funds to develop the connector road
from Shelbyville Road to Hurstbourne Lane

c) Obtain state and metro government support to widen the intersection at Shelbyville Road and Hurstbourne Lane

Action Item 2:

Create a not-for-profit corporation to oversee the ongoing development by
June 2005 and begin exploration of additional financing strategies

Action Item 3:

Begin discussions on the Whipps Mill parcel by June 2005

a) 4.7 acres for residential use

b) 12.3 acres for community park, with the City of Lyndon or Metro
Parks

Action Item 4:

Begin the process to obtain the necessary zoning changes for development
parcels by July 2005

Action Item 5:

Begin joint planning discussions with the Musselman Hotels by March 2005
regarding the conference center partnership

VI. Other Business

Chair Pierce thanked Vice President Curtin for presentations of the financial statements, benchmark comparisons, state appropriations, and Fiscal Year 2006 projections at the Finance Committee’s workshop on March 22. Chair Pierce welcomed all board members to attend the next Finance Committee pre-meeting, scheduled in May.

VII. Adjournment

The meeting adjourned at 3:15 p.m.