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.
The Executive Committee of the University of South Carolina Board of Trustees met on Thursday, June 20, 2002, at 3:00 p.m. in the Carolina Plaza Board Room.
Members present were: Ex Officio Chairman of the Board of Trustees, Governor James H. Hodges; Mr. Mack I. Whittle, Jr., Chairman; Mr. Herbert C. Adams, Vice Chairman; Mr. James Bradley; Dr. C. Edward Floyd; Mr. William C. Hubbard; and Mr. Michael J. Mungo. Other Trustees present were: Mr. A.C. Fennell, III; Mr. Samuel R. Foster, II; Mr. Miles Loadholt; Ms. Darla D. Moore; Mr. M. Wayne Staton; Mr. John C. von Lehe, Jr.; and Mr. Othniel H. Wienges, Jr.
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; Vice President and Chief Financial Officer Richard W. Kelly; Vice President for Information Technology and Chief Information Officer William F. Hogue; Vice President for Human Resources Jane M. Jameson; Vice President for Student and Alumni Services Dennis A. Pruitt; Vice Provost and Executive Dean for Regional Campuses and Continuing Education Chris P. Plyler; Chancellor of USC Aiken Thomas L. Hallman; Chancellor of USC Spartanburg John C. Stockwell; Associate Provost and Interim Vice Provost and Dean for Libraries and Instructional Services John N. Olsgaard; Associate Chancellor for Business and Finance, USC Aiken, Virginia S. Steel; Legal Counsel Walter (Terry) H. Parham; Assistant Treasurer Susan D. Hanna; Director of Student Development and University Housing, Division of Student and Alumni Services, Gene Luna; Director of Student Life, Division of Student and Alumni Services, Jerry Brewer; Associate Dean for Administration and Finance, School of Medicine, Brian J. Jowers; Senior Associate Athletics Director John T. Moore; Business Manager for Student Development and University Housing, Division of Alumni and Student Services, Darryl Davis; Director of the Office of Budget William P. Bragdon; Assistant Budget Director Glenda Ridgely; Assistant to the Vice President, Office of Business and Finance, Ken Corbett; Director of Internal Audit Alton McCoy; Professor, School of Law, and Chair of the Faculty Senate, Robert M. Wilcox; Director of Governmental and Community Relations, Office of the President, Shirley D. Mills; Director of Presidential Communications and Research, Office of the President, Gail Widner; Student Government Association President Ankit Patel; Student Government Association Treasurer Becky Floyd; President of Carolina Productions David Schroder; General Manager of Host Communications Elizabeth McMillan; wife of President John M. Palms, Norma Cannon Palms; University Legislative Liaison John Gregory; Office of the President staff members: Celia Hartman, Pamela Sowles, and Gloria Faircloth; Director of the Office of Public Affairs Russell McKinney; and members of the media.
Before officially calling the meeting to order, Chairman Whittle recognized Governor Hodges who thanked him for the opportunity to speak before the Executive Committee. He asked Dr. and Mrs. Palms to join him at the podium.
Governor Hodges made the following remarks:
John has done a remarkable job. I had the chance recently to reflect upon his tenure here at USC and to look, Mr. Chairman, at how much life had changed around our campus during John and Norma Palms' tenure. He has been a remarkable leader.
I think that both the faculty and the Board, members of the Legislature, the governors who served prior to me, and, I, would acknowledge that USC has taken a long step on its journey to being a world class institution during John Palms' tenure.
When I think back to where we were some decade ago and where we are now and the level of excitement that exists, I think about the construction that has occurred on campus; the phenomenal professional growth in our faculty at USC; the growth of the endowment; the very exciting Capital Campaign that has been undertaken; and the quality of life for students that are here. It really has been an exciting era and that journey has been led by John Palms. He is turning the University over to Andrew Sorensen during a time that, I think, is very challenging for the University. But he also turns it over a better place than I think it was when he came here.
Dr. Palms makes my USC degree look better and it makes me proud every day to say that I am a graduate of the University of South Carolina. I look at his tenure at the University as a real golden period for the University, I think, and look with great excitement and anticipation on what will happen in the future. What's great about it is that John is still a young man; he has a lot of great work still left to do. I know he has some exciting things planned and he and Norma are looking forward to somewhat of a retired life down in Charleston and here in Columbia as well. They have some ventures planned that will continue to stimulate both of them and provide very exciting professional growth opportunities.
I asked Norma to join me so that I could offer you a unique award and also a unique way to show how much South Carolina thinks of you for what you have done here during your era as President of the University by bestowing upon you South Carolina's highest award, the Order of the Palmetto.
President Palms made the following remarks:
You have heard me say many, many times that I don't believe there is a better way to serve than to equip people to live their own lives with full capacity and it is our job to educate the mind and the heart in that process.
I am also pleased that today I am surrounded by all the people who have made our success possible. As we so frequently have heard, there is no limit to what one can achieve if one does not really worry about who gets the credit. This room is full of people (and I can attest to numerous occasions where they set aside their own special interest) who just rolled up their sleeves and accomplished what had to be done at that particular time. That includes the Board of Trustees, all my fellow deans and members of the administration. Again, I want to thank Norma, because I need a constant psychiatrist and psychologist with me to keep me in good perspective. She is also my spiritual advisor and this is a spiritual journey, as you know, and education is a moral enterprise. I do not think I could be more blessed and this is a great honor. I accept it on behalf of all those who are part of these achievements.
Thank you very much.
At this time, Chairman Whittle called the meeting to order and invited Board members to introduce themselves. Mr. McKinney introduced members of the media who were in attendance. Chairman Whittle 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 members of the Committee; and a quorum was present to conduct business.
There were contractual matters which were appropriate for discussion in Executive Session. Chairman Whittle called for a motion to enter Executive Session. Mr. Bradley so moved, and Mr. Adams seconded the motion. The vote was taken, and the motion carried.
The following persons were invited to remain: Dr. Palms, Mr. Stepp, Dr. Odom, Mr. Glenn, Mr. Kelly, Dr. Pruitt, Ms. Jameson, Mr. Parham, Dr. Plyler, Ms. Hanna, Dr. Hogue, Dr. Moore, Ms. McMillan, Mr. McCoy, Mr. McKinney, Mr. Gregory, Ms. Salmons and Ms. Tweedy.
Return to Open Session
Chairman Whittle altered the order of the agenda items to facilitate the presentation of the FY 2002-2003 University budget.
Mr. Mungo moved approval of the University request to forward to the State for approval a University request to lease a portion of the BellSouth Building to the National Advocacy Center as described in the materials distributed for this meeting. Mr. Bradley seconded the motion. The vote was taken, and the motion carried.
Mr. Bradley moved approval of the leases for Student Housing as described in the materials distributed for this meeting, the total amount not to exceed $860,000 as Mr. Parham had explained during Executive Session. Mr. Mungo seconded the motion. The vote was taken, and the motion carried.
Mr. Mungo moved approval of the amendment of the contract with Host Communications, Inc., and Citadel Communications Corp., as reviewed by Mr. Parham during Executive Session. Mr. Bradley seconded the motion. The vote was taken, and the motion carried.
Mr. Mungo moved approval of the reclassification of Student Facilities Fees as State Institution Bond Fees as described in the materials distributed for the meeting. Mr. Bradley seconded the motion. The vote was taken, and the motion carried.
Appropriations for FY 2003 reflected a decrease of $20 million for the entire USC system and more than $14 million for USC Columbia. President Palms commented that the University may be required to sustain an additional $4 million reduction. Budget hearings with the deans had been conducted; President-Elect Sorensen had attended the final meetings of the budget committee and had supported the budget to be presented for Executive Committee approval.
"Our purpose was to restore the cuts, to adhere to the SDI recommendations as you have endorsed, and I have endorsed, to keep the University affordable for all the students who come here and to service those students once they get here to provide adequate sections, quality instruction, and quality of life. Those are the purposes of this budget."
Mr. Kelly discussed the proposed budget in detail noting that USC Columbia would be the primary focus. He reviewed the Budget Office mission statement which, he explained, had the primary purpose of preparing a budget for recommendation to the President. This process had begun in January with notification to vice president, deans, and department heads to begin working toward presentations; in May, the Budget Office had heard the various presentations. Mr. Kelly commented that the budget process had been complicated this year because of two mid-year cuts during the current fiscal year, and a third cut at the end of the year which would roll over into the FY 2003 budget. He emphasized that the two driving factors to ensure a very responsible budget had been "framing a budget that would address the mid-year cuts and making sure we had a stable financial position for this University; and secondly, and almost identical to the first, we knew through Dr. Odom's Strategic Directions and Initiatives report, we really had your approval on the framework of how we move forward in the years to come."
In November of this year, the University had sustained a 4 percent budget cut, or $6.8 million for USC Columbia; again, in March, the University budget had been reduced another 2.52 percent or $4.135 million for USC Columbia. Mr. Kelly noted that the legislative budgetary process clearly indicated that these two cuts would reduce the base budget coming into this year. An additional cut in July of 2.035 percent or $3.34 million for USC Columbia would be necessary as the General Assembly was balancing the budget at the end of the year. "The two previous cuts, the one in November and the one in March were dollars that we actually had to give back this year and they were also reduced from the base going into next year. The July cut was just a reduction and not something we had to give back, but reflecting a smaller amount of money that we were going to get." The total of those cuts, $14,314,218, had been reduced from the base of the state allocation for last year; in addition, 100 percent of CHE funding or $640,000 had been cut. Therefore, the total cut for USC Columbia was approximately $15 million in base funding from the state.
Mr. Kelly reviewed the sources of funds for allocation. He stated that the general fund recurring unallocated balance of $467,442 and the general fund carry forward nonrecurring amount of $1,964,869 were additional sources to the budget for this year. An annualized student tuition increase from spring 2002 of $1,277,113 was also included. The proposed 17 percent student tuition increase for FY 2003 would generate $11,560,000.
Mr. Kelly also explained that the base budget for freshmen tuition had been factored on last year's head count of 3,200 students; with the anticipated increase of at least 300 freshmen above this number for the upcoming fall semester, approximately $1.02 million of added tuition revenue would be generated. Should that number increase, for each 100 students, an additional $340,000 would be raised. Other sources of funds included the annualized state health insurance for FY 2002 increase of $440,422; an institutional direct charges increase of $244,747; a Law School fee increase of $321,262; and an other general fund revenue of $130,000.
The remaining three items -- change in non-resident scholarship fee of -$400,000; fee distribution for Wellness Center at $65 per student of -$2,220,000; and fee distribution for student computing fee at $50 of -$1,805,000 were recognized as revenue sources "that will be deducts from our revenue source" as Mr. Kelly briefly clarified for the Committee.
Funds available for FY 2003 totaled $13,000,855. Mr. Kelly reminded the Committee that the budget cut of 2.035 percent "provided to us by the General Assembly at the end of the legislative session has not been distributed to the departments and Dr. Palms, Dr. Odom, and Dr. Sorensen agreed that if that money did not have to be distributed, it would allow the departments to continue to focus on the quality that is required. That $3,340,000 budget cut that we will face a reduction from last year will be taken out of the general fund." Therefore, net funds available for FY 2003 allocation totaled $9,660,423.
Mr. Kelly summarized the allocation of these funds which included Academic Programs ($2,438,262); Other Academic and Student Services Programs ($269,201); General Institutional Costs ($2,400,921); and Central Operations and Support Programs ($2,474,995) for a total allocation of $7,583,379.
President Palms commented that the state had not appropriated funds for faculty or staff salary increases. To express appreciation, the University had allocated an average one percent merit increase to faculty for that purpose. Mr. Kelly noted that the staff would receive an average $250 merit bonus; executives would not be eligible for either of these compensations.
In conclusion, Mr. Kelly stated that the proposed FY 2002-2003 budget would have a net balance of funds in the amount of $2,077,044.
Mr. Mungo moved the adoption and recommendation to the Full Board of the operating budget for fiscal year 2003, as presented, including tuition and fee schedules, the housing budget and associated fee changes, the athletics budget, and the designated funds budget. He asked that a caveat be inserted requiring the approval of President-Elect Sorensen. He believed that President-Elect Sorensen should have the opportunity "to come here and see what we are doing, how we are doing it, and then let him make his recommendations once he is on site." Mr. Bradley seconded the motion.
Mr. Hubbard asked if the remaining net balance of funds would be considered as a contingency if there was another budget cut; Mr. Kelly indicated that the money would be used for that purpose if necessary.
On behalf of the Executive Committee and the other Board members, Mr. Bradley expressed appreciation to Mr. Kelly and the budget staff for the well-presented financial information.
At this time it was decided to table a request from the Student Government Association president, Ankit Patel, to present a proposal about increasing the student activity fee until the June 27, 2002, Board of Trustees meeting.
Mr. Mungo called for the question on the adoption of the proposed budget. The vote was taken, and the motion carried.
Since there were no other matters to come before the Committee, Chairman Whittle declared the meeting adjourned at 4:30 p.m.
Respectfully submitted,
Thomas L. Stepp
Secretary