The official minutes of the University of South Carolina Board of Trustees are maintained by the Secretary of the Board. Certified copies of minutes may be requested by contacting the Board of Trustees’ Office. Electronic or other copies of original minutes are not official Board of Trustees' documents.
Executive Committee
February 24, 2000
The Executive Committee of the University of South Carolina Board of Trustees met on Thursday, February 24, 2000, at 11:00 a.m., in Conference Room 250, of the Carolina Plaza.
Members present were: Mr. William C. Hubbard, Chairman; Mr. James Bradley; Dr. C. Edward Floyd; Mr. Samuel R. Foster, II; Mr. Michael J. Mungo; and Mr. Mack I. Whittle, Jr., Vice Chairman. Board member Mr. Robert N. McLellan was also present.
Others present were: President John M. Palms; Secretary Thomas L. Stepp; Executive Vice President for Academic Affairs and Provost Jerome D. Odom; Vice President and Chief Operating Officer J. Lyles Glenn; Executive Director of Foundations Susie H. VanHuss; Vice President for Development Charles D. Phlegar; General Counsel Walter (Terry) H. Parham; Vice President for Business and Finance John L. Finan; Vice President for Human Resources Jane M. Jameson; Director of the Department of Athletics Michael B. McGee; Senior Associate Athletics Director John T. Moore; Vice President for Student and Alumni Services Dennis A. Pruitt; Assistant Vice President for Business and Finance Ken Corbett; Director of Public Affairs Russell McKinney; and representative from Media Relations Jason Snyder.
Chairman Hubbard called the meeting to order and invited those present to introduce themselves. Chairman Hubbard stated that notice of the meeting had been posted and the press notified as required by the Freedom of Information Act; the agenda and supporting materials had been circulated to the members of the Committee; and a quorum was present.
There was a contractual matter regarding a gift naming opportunity appropriate for Executive Session. Mr. Bradley moved to enter Executive Session. Mr. Foster seconded. The vote was taken and the motion carried.
Mr. Hubbard asked the following people to remain: Dr. Palms, Mr. Stepp, Dr. Odom, Mr. Glenn, Mr. Finan, Ms. Jameson, Dr. Pruitt, Mr. Phlegar, Mr. Parham, Dr. Plyler, Mr. McKinney, Ms. Hyatt and Ms. Mayfield.
Executive Session
Return to Open Session
The project account was incurring expenditures, and the University was concerned about the use of operating reserves prior to the sale of the bonds to accommodate the university cash flow requirements. The Administration requested the Board's approval to reimburse any University operating reserve account, that might have been utilized the interim, after the bonds were sold.
Mr. Bradley moved approval, and Mr. Mungo seconded. The vote was taken, and the motion carried.
Mr. Mungo asked about the private funds, and Mr. Finan stated that these funds came from the sale of Bell Camp that had been designated for student recreational purposes. Mr. Mungo stated that any approval given in regard to the building should include that an appropriate area be named after Mr. Bell. Mr. Whittle suggested this matter be considered by the Gift Naming Opportunities Committee.
Under the contracts, the University could assign work to any one of the construction companies on an "as needed" basis. The University would not be obligated to assign any work to these companies.
The four contracts were identical. The State Engineer prohibited any company from being paid more than $150,000 under one project and $750,000 in any two years. Projects that were over $250,000 would be presented to the Executive Committee for approval.
Mr. Mungo moved approval of the Letter of Surety, and Mr. Bradley seconded.
Mr. Mungo then stated that the University should have the right to renegotiate the terms. Mr. Hubbard asked Dr. McGee to outline his perception of the agreement and its essential terms. Dr. McGee stated that the agreement included a Letter of Credit for $1 million with a mutually agreed bank or similar financial institution at the commencement of the contract which would be offset over a period of time by a $1 surcharge added to each ticket. These funds would be held in escrow.
Mr. Mungo stated his concern with the escrow funds offsetting the $1 million surety. Concern for ticket sales was one of the reasons for the protection. If the University drew on it, the surety would start shrinking. Dr. McGee stated that the pro forma projected a minimum level of income, and the University had assured itself of an outside limit of protection.
Mr. Bradley commended Dr. McGee for his work in negotiating the contract and then inquired about the type of institution which would issue the Letter of Credit. Dr. McGee replied that he did not know if it would be a bank or a bonding company, but, upon receipt, it would be presented to the President office and the Executive Committee.
The motion as stated was to assure the administration that the letter of surety was sufficient to meet the conditions of the motion of the Buildings and Grounds Committee for the construction of the arena, the determination requested of the Executive Committee by the Building and Grounds Committee. Mr. Hubbard suggested amending the motion to include the condition that the Executive Committee had final approval of the Letter of Surety and Mr. Bradley accepted the recommendation to the motion. Mr. Mungo said he hoped the University would have the letter signed before asking the Board for final approval. Dr. McGee replied that the date had not been set, and he would bring the documentation to the Executive Committee.
The vote on the amended motion was taken, and the motion carried.
The purpose of the agreement was to address three specific matters. First, it would reserve the continuous use of the Carolina Coliseum for women and mens basketball. Second, it would allow other commercial revenue to be generated during the course of the hockey season and insure that all costs and expenses associated with hockey were borne by the hockey club. Third, it would allow the hockey team every chance to be financially successful while in the Carolina Coliseum.
The essential terms of the agreement covered the 2001-2002 hockey season, which generally ran from October through May. The agreement allowed for an extension of an additional season if mutually agreed. Specific dates would be made available to the hockey team for games. Practices would be subject to availability, and the practice schedule would subsequently be worked out between the University and the hockey team. Women and mens basketball, the circus, and university events would take precedence for bookings.
Columbia Hockey would be responsible for: (1) all costs associated with retrofitting the Carolina Coliseum and installing and maintaining an ice rink; (2) paying the University all actual costs incurred by the Coliseum including but not limited to utilities, labor, and security; and (3) using the ticket system at the University and paying the normal cost of generating the tickets for their hockey games. The agreement provided for a $1 "facilities rental fee" to be added to each ticket. The hockey team would be allowed to retain all revenue resulting from the sale of hockey merchandise, novelties, game programs, and temporary advertising signage. Any and all advertising would have to be approved by the University to be sure that it did not conflict with any of the University's permanent advertising.
The University revenue in connection with the hockey agreement would come from two sources: (1) the University would retain all revenue from concessions; and (2) the University would retain all revenue from the sale of parking associated with the hockey season.
A major point in the agreement was the renovation of the Carolina Coliseum. Columbia Hockey would provide the University with architectural and engineering design plans. If the University needed an outside consultant to review the plans, the cost would be borne by the hockey team. If the parties had not reached an agreement regarding renovations before October 15, 2000, the agreement would automatically be null and void.
Finally, the agreement had an insurance provision. It had a complete indemnification for Columbia Hockey for any ongoing damage of the Carolina Coliseum.
Mr. Bolin stated that the University could make $400,000 - $500,000 on beverages and parking for one season if attendance was excellent. He said the revenue would depend on the attendance because it would be derived from concessions and parking.
When Mr. Whittle asked how many games were in a season, Mr. Bolin replied 35. Mr. Mungo added that the University would be helping to establish hockey and public interest in hockey one year before the new arena.
Mr. Bradley moved approval of the Lease Agreement of the Carolina Coliseum by Columbia Hockey, LLC. Mr. Foster seconded.
Mr. Bradley stated his concern with only $1 million of liability coverage. The seats would be moved and reconfigured. Temporary seats would be installed It would not cost Columbia Hockey a great deal to increase this coverage by several million dollars. Mr. Parham replied that $1 million was the amount the University maintained through the State Insurance Reserve Fund. Mr. Hubbard asked Mr. Bradley if the Executive Committee could amend his motion to approve the lease agreement with the understanding that Mr. Bolin would use his "best efforts" to increase the general liability coverage. Mr. Bradley accepted the amendment.
Mr. Bradley said that if the University would be the contractor for the renovations, Columbia Hockey should put some money "up front" to insure that the money was "in hand" to pay for renovations.
The vote was taken, and the motion carried as amended.
There being no other matters to come before the Committee, Mr. Hubbard declared the meeting adjourned at 12:00 noon.
Respectfully submitted,
Thomas L. Stepp
Secretary