Meeting Minutes - August 2004

Minutes of the Meeting of the Board of Regents of the University System of Georgia
Held At 270 Washington St., S.W., Atlanta, Georgia
August 3 and 4, 2004

CALL TO ORDER

The Board of Regents of the University System of Georgia met on Tuesday, August 3 and Wednesday, August 4, 2004, in the Board Room, room 7007, 270 Washington St., S.W., seventh floor. The Chair of the Board, Regent Joel O. Wooten, Jr., called the meeting to order at 1:00 p.m. on Tuesday, August 3. Present on Tuesday, in addition to Chair Wooten, were Vice Chair J. Timothy Shelnut and Regents Hugh A. Carter, Jr., Connie Cater, William H. Cleveland, Joe Frank Harris, Julie Hunt, W. Mansfield Jennings, Jr., James R. Jolly, Donald M. Leebern, Jr., Elridge W. McMillan, Patrick S. Pittard, Doreen Stiles Poitevint, Wanda Yancey Rodwell, Allan Vigil, and Glenn S. White.

ATTENDANCE REPORT

The attendance report was read on Tuesday, August 3, 2004, by Secretary Gail S. Weber, who announced that Regents Michael J. Coles and Martin W. NeSmith had asked for and been given permission to be absent on that day.

APPROVAL OF MINUTES

Motion properly made and duly seconded, the minutes of the Board of Regents meeting held on June 8 and 9, 2004, and the special meeting held by conference call on July 9, 2004, were unanimously approved as distributed.

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SPECIAL PRESENTATION HONORING REPRESENTATIVE LOUISE McBEE

Chair Wooten invited Representative Louise McBee to join him at the podium with Chancellor Meredith and the Senior Vice Chancellor for External Activities and Facilities, Thomas E. Daniel. He explained that he wanted to take this opportunity to recognize and thank one of the Board's and the University System's best friends and strongest supporters, State Representative Louise McBee of Athens. He noted that he had first met Representative McBee when she was Dean of Students at the University of Georgia ("UGA").

Chair Wooten said there are hundreds of people who serve in the Georgia General Assembly. Each year, the legislature wrestles with a mountain of complex issues and legislation, and it is virtually impossible for any single representative or senator to know everything. So, the Regents are fortunate that Georgia's legislative body has evolved in a way that allows individual members to become experts in a few key areas. Their expertise is acknowledged by their peers in the House and Senate, who come to depend upon them for guidance in crafting legislation and shaping the budget. During her 13 years in the Georgia House of Representatives, Louise McBee became the expert on public higher education in that body. When members had questions, wanted information, or sought a sound opinion on public higher education issues, they knew that they could go to Representative McBee for the facts and the straight answers. They knew that she would know the latest information, and they were never disappointed. Her acknowledged expertise on the business of knowledge and education led to her selection as Chair of the Higher Education Committee, and from that post, Representative McBee was able to provide good and wise counsel not only to her elected peers, but to Chancellor Meredith and this Board. There are those who would say that Representative McBee's knowledge is based primarily upon her 25 years of service as a UGA administrator, remarked Chair Wooten. He agreed there is no question that her tenure at UGA gave her a great foundation for her expertise, but once in the Georgia House, Representative McBee did not depend upon that background alone. She never assumed that she already had all of the information she would need. When it came to the University System of Georgia, Representative McBee truly was a lifelong learner. She never stopped asking questions, reading up on the latest trends and developments nationally, and keeping up-to-date on what was happening with this Board's actions and policies, and she never lost sight of her responsibility to serve people. She understood the needs and circumstances of all Georgians and especially students. She worked diligently to represent them and to communicate their situation to her peers and to the Regents. She helped the Board make wise decisions. As a result of her professional experience and her thirst for information, Representative McBee has performed service on behalf of the citizens of Georgia and the University System that are truly beyond value. As a Board, the Regents have attempted to express their thanks and gratitude for Representative McBee's outstanding record of public service with the special professorship approved in June 2004 and established at UGA in her name. While that is a very fitting tribute to her accomplishments, the Regents also wanted to thank Representative McBee in person. Chair Wooten asked the Regents to join him in a heartfelt demonstration of their appreciation and thanks for all that Representative McBee has done and meant for public higher education in Georgia. On behalf of the Board, he thanked her and wished her all of the best.

Representative McBee thanked Chair Wooten for this special recognition and his kind words. She said that she has had two wonderful careers in the State of Georgia. First, she served for 25 years at UGA, which has become over the years one of the greatest universities in the nation. Then, she served in the Georgia General Assembly for 13 years. She remarked that the legislature works very hard but must supply additional resources for higher education. In both careers, Representative McBee worked with the Board of Regents, five Chancellors, and their staffs, who have built one of the best higher education systems in the country. She said that she values the friendships and the support of many through the years and certainly the Regents present at this meeting. She has spent much of her tenure in the legislature working for higher education. The last two years, she served as Chair of the Higher Education Committee, which was especially rewarding. She remarked that this was the best committee in the legislature because the committee members get to work with the brightest people in the state. She knows most of the presidents in the University System of Georgia, and she has visited most of the institutions. She has taken delight in seeing the special role and strengths brought to the System by the individual institutions. Working with the Regents and the University System Office staff has been a real joy, she said. Chair Wooten was President of the Senate at UGA at the time Representative McBee was Dean of Students. He was an outstanding student and leader, and he will give the same excellent leadership to the Board of Regents as he did to the students at UGA. Representative McBee said she was very proud of him. She then expressed appreciation to Chancellor Meredith, who came to the University System at a time when the budget was tightest. He has been patient and kind and has provided stellar leadership during a difficult period. She also expressed her appreciation to the Senior Vice Chancellor for External Activities and Facilities, Thomas E. Daniel. She never called Mr. Daniel when he was not kind and gave her good information and good advice. She said that she values Mr. Daniel's friendship and will always be grateful for his assistance. In January 2005, Representative McBee will no longer serve in the legislature, but she will be in Atlanta in spirit and will continue to be a cheerleader for higher education. She said that the State of Georgia can be no better than its system of higher education. As she looks ahead and contemplates the Regents' task as leaders in the months and years ahead, she wonders what it will take to eliminate the continuing educational underdevelopment of so many segments of society. She encouraged the Board to seek ways to reduce the growing disparities between the haves and the have-nots. Reliable data show that the economically disadvantaged are adversely affected in terms of educational opportunity and achievement. The University System of Georgia has made great strides in closing the academic achievement gap, and Representative McBee commended the Regents and the University System Office staff for their efforts in this regard. She said that she expects the "Education – Go Get It" program to do great things for the state. In closing, she thanked the Regents for all they do and will continue to do for the State of Georgia and for the recognition they had given her at this meeting.

Chair Wooten noted that Representative Lee N. Howell from Griffin was also in attendance at this meeting. He thanked Representative Howell for joining the Regents in recognizing Representative McBee.

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SPECIAL RECOGNITION OF REGENT EMERITA ALLENE MAGILL

Chair Wooten asked Chancellor Meredith to return to the podium and invited Regent Emerita Allene H. Magill to also join him so that the Regents could honor her for her excellent service to the Board. Regent Magill had an illustrious career in education, and the Board of Regents needs that kind of expertise. She brought to the Board a very special prospective that illuminated many Regent discussions. She was appointed by Governor Roy Barnes as a Regent from the ninth district, which in redistricting became the tenth district. Then, Regent Magill moved to Cobb County to become President of the Professional Association of Georgia Educators ("PAGE"), a truly outstanding organization which is also the largest professional association for educators in the state. Before PAGE, Regent Magill made her mark as an extraordinary educator in several positions in several different locations around the state, first in Paulding County, then in Forsyth County, then with the Dalton public schools. She brought energy, intelligence, and the ability to bring teamwork to the Board of Regents and to each of the public school systems in which she served. Teachers, parents, students, and communities all worked together under Regent Magill. Her record of success is well documented, and she is continuing her good work today. Chair Wooten said that Regent Magill is missed on the Board. He said that her replacement, Regent Jolly, is already showing his very valuable insights in moving the Board's work along to very positive results. Chair Wooten thanked Regent Magill for her service to the University System of Georgia. On behalf of the Board of Regents, he then presented a Brumby rocking chair to Regent Emerita Magill as a token of appreciation.

Regent Emerita Magill said that serving on the Board of Regents was a wonderful experience that was also a learning experience at every meeting. At every meeting, there were worthwhile discussions to improve Georgia as a state and to make things better for postsecondary students in the state. She said that she has a passion for ensuring that the Board is cognizant of the P-12 system. She noted that Representative Louise McBee supported P-12 system as well. Regent Magill said that it was a pleasure to work with the Regents and that she missed them. She said that she has always respected Governor Harris, and serving under his leadership as Chair of the Board of Regents was a tremendous experience for her. She said that the Board currently has two very fine leaders in Chair Wooten and Vice Chair Shelnut. Regent Emerita Magill said that if she could help the Regents in any way, she would be glad to do so. In closing, she said that she was very pleased that the Governor made the decision to appoint Regent Jolly in her place because it is a compliment to both him and North Georgia. She thanked the Regents for the rocking chair and said that she would always remember the Board of Regents with great fondness.

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REPORT ON HEALTH PROFESSIONALS INITIATIVE

Chancellor Meredith said that he next wanted to take a few moments to celebrate an accomplishment of the University System of Georgia. The System's structure enables it to respond quickly to state needs. It is this ability that has made the Intellectual Capital Partnership Program ("ICAPP®") so effective in the economic development arena. The current ICAPP® success story is the ICAPP® Health Professionals Initiative (the "Initiative"). As it has been reported in the news media and through the System's own research, the nation and Georgia are looking at two sets of numbers going in opposite directions. Increasing numbers of baby boomers are about to hit retirement, but the numbers of people employed in the health professions is not keeping up with the increasing healthcare needs of older Americans. That growing gap presents a healthcare shortage and problem. So in 2002, the University System responded to a request from the Georgia Hospital Association to create new programs to address this shortage. The System used its ICAPP® model of "just-in-time needs for business" to develop the ICAPP® Health Professionals Initiative. The System promised to add an additional 500 healthcare professionals through this Initiative; those are numbers over and above what the System's existing degree programs already were turning out, which averages 1,300 graduates per year. The System created and implemented this initiative through a strong network of good partners. In addition to the Georgia Hospital Association, the partners included the Georgia Department of Economic Development, the Georgia Student Finance Commission, and the Department of Community Health ("DCH"). The University System's Office of Economic Development worked with the Office of Academic Affairs and participating System institutions to ensure the project's curricula was appropriate. The System has also enjoyed the strong support of the Governor and the General Assembly.

Over the past two fiscal years, the Initiative has become a $6.75 million public-private partnership between 36 Georgia healthcare providers and 13 System institutions, reported Chancellor Meredith. The result is not 500 additional healthcare professionals, but actually 632 graduates in the critical fields of nursing, medical technology, and pharmacy. These 632 graduates are guaranteed jobs by the private partners in 19 communities that cover both rural and metropolitan areas. It is estimated that these jobs will generate a total additional annual payroll of $16.7 million. This Initiative was carefully structured with clear accountability measures, and the results from this Initiative meet the System's accountability goals. The Initiative is proof positive of what can be achieved when the Board mobilizes strong public-private partnerships to tackle a problem. The System responded quickly and efficiently, and the result will mean better healthcare for Georgians.

The first phase of this Initiative was so successful that it is now moving into the second phase. The Chancellor was pleased to announce at this meeting phase two of the ICAPP® Healthcare Professionals Initiative. Phase two will be structured along the same lines as phase one. It will involve 12 University System institutions and 26 employer partners. There will be a state commitment of $3.8 million, matched by $3.2 million in cash and in-kind support from the private sector. The institutions and private sector partners will identify potential candidates for the program. Phase two will have a two-year cycle, and its goal is to graduate an additional 721 healthcare professionals for Georgia. As they did in phase one, the private sector partners will guarantee these graduates jobs. The System is launching phase two because the shortage of healthcare professionals continues to grow. For example, in the field of nursing, DCH released its annual report from the Health Care Workforce Policy Advisory Committee in September 2003. While Georgia currently has 90,000 registered nurses, by the year 2010, nearly 30,000 more will be needed. The fact is that just as the general population is aging, the average age of nurses is increasing as well; 50% of the nursing population is over the age of 45.

There is another issue that phase two of the Initiative will help address, said Chancellor Meredith. That's the increasing age of our nursing faculty. According to the Southern Regional Education Board, out of 444 faculty positions in 24 Georgia nursing programs in the 2002-2003 academic year, 65 will probably be vacant by the end of the 2004 academic year due to retirements and resignations. In fall 2003, Georgia College & State University ("GCSU") had 58 qualified nursing applicants who could not be admitted because of nursing faculty shortages. So one of the new programs that will be rolled out in phase two will be an ICAPP® Nurse Educator Program at GCSU. This project will target registered nurses ("RNs") who are interested in becoming nurse educators. RNs with an associate degree in nursing or a bachelor of science in nursing will be able to enter this expedited program and complete the coursework necessary to earn a master of science in nursing with a teacher certificate. "What's different in this program from our other nurse educator offerings?," asked the Chancellor. He explained that the ICAPP® program will offer more flexibility for students and will reduce their preparation to teach nursing at the college level from the current 14 semesters to 8. Exceptional students could finish the program in six semesters.

Chancellor Meredith said that the ICAPP® Initiative is the right model to meet the need for more healthcare professionals in Georgia. It is a proven winner, and he said that phase two will be even better. That is because the System has the right programs, the right partners, the right support, and clear accountability for its efforts. The Chancellor said he looks forward to bringing the Regents more great results from phase two in two years. He then called upon the Executive Director of the Office of Economic Development, Joy Hymel. She would be introducing to the Board three of the 632 graduates who have been educated through the ICAPP® Healthcare Professionals Initiative.

Ms. Hymel thanked the Chancellor and the Board for giving her to opportunity to introduce three of the ICAPP® Health Professional Initiative graduates and Mr. Joseph A. Parker, President and Chief Executive Officer of the Georgia Hospital Association ("GHA"). First, the graduates would give the Regents an up-close and personal view of the life-changing power of the ICAPP® Initiative. Ms. Hymel first introduced Ms. Adonness Almon from Clayton State University ("CSU").

Ms. Almon greeted the Chancellor and the Regents. She said that she is a student in the ICAPP® Initiative program at CSU. Her dream in the fourth grade was to work in the medical field, particularly in baby delivery. She graduated from Tennessee State University with a bachelor of science degree in biology and also attended Georgia Medical Institute so that she could work as a medical assistant. For two years, she worked in a doctor's OBGYN practice. That experience helped reinforce her goal of someday delivering babies. She considered going to medical school but decided instead to become a nurse. She had plans to eventually earn a master of science in nursing to become a midwife. Her experience in the ICAPP® Initiative program at CSU has been incredible, said Ms. Almon. The program has great faculty who really care about helping students succeed. Students have faculty mentors who meet with them once a week. Ms. Almon's faculty mentor is Instructor Angela Guidry, RN and Certified Pediatric Nurse Practitioner. She gives her students assignments each week, and the following week, they review the assignments and the students' progress in their classes. The students' mentors are always available should students run into any difficulties at school or in their lives that threaten their progress in the program. This fall, Ms. Almon will take a class called Role Transitions, which will guide her as she transitions from being a student to being a nurse. Part of this transition is preparation for the nursing licensure exam. She is on track to graduate this December, and she is currently doing her externship at Piedmont Medical Center in labor and delivery. She stated that she loves it and hopes to continue to work there after graduation. In closing, Ms. Almon said that the ICAPP® Initiative nursing program at CSU is making it possible for her to fulfill her dreams.

Ms. Hymel said that the next student she would like to highlight was Mr. Charles Wilson from Abraham Baldwin Agricultural College ("ABAC"). Mr. Wilson had an unexpected conflict that prevented him from being in attendance at this meeting, but his story is so powerful that Ms. Hymel asked Ms. Wanda Golden, Assistant Professor and Chair of the Division of Nursing and Health Services ABAC, to share it with the Board.

Ms. Golden greeted the Regents. She said that Mr. Wilson was the first graduate of the ICAPP® Initiative nursing program at ABAC and that she would be sharing Mr. Wilson's prepared remarks. He has been a paramedic for 17 years, and he is the Assistant Chief of Clinical and Educational Services for South Georgia Medical Center. His office trains the paramedics for emergency medical services based at South Georgia Medical Center, and now, thanks to the ICAPP® Initiative, he is an RN. The ICAPP® Initiative allowed him to work full-time while earning his associate's degree in nursing at ABAC. There was no way he could have managed his schedule to take nursing courses the traditional way. The ICAPP® Initiative nursing students meet one day a week for three semesters in order to complete the program. The ICAPP® Initiative accelerated program at ABAC offers classes on Wednesdays. Mr. Wilson's employer allowed him to work a flexible schedule so that he was able to be off on those days. He cited four examples of what becoming an RN has meant for him and for South Georgia Medical Center. First, the paramedics work with the nurses and the physicians as a team to provide medical care to patients. Because of his nursing education, Mr. Wilson can better train the paramedics to merge their care with what the nurses and physicians provide for better patient care. Second, many times, doctors require that an RN travel in the ambulance with patients while they are being transferred from one hospital to another, particularly if they are on critical care medications and drips. Now, Mr. Wilson can fill that role so that the hospital does not have to pull a nurse from his or her regular duties, and he can provide better care, since he is more familiar with ambulances than other nurses are. Third, since he earned his instructor credentials in neonatal resuscitation, the hospital can now provide that training in-house rather than sending the nurses out for that training. Fourth, in his off hours, Mr. Wilson also works as a RN in the emergency rooms of South Georgia Medical Center and Smith Northview Hospital. He has also completed all of his testing to become a flight nurse for the South Georgia area where he will fly on fixed-wing aircraft and helicopters to support critically ill trauma patients. The ICAPP® Initiative program at ABAC is improving patient care at South Georgia Medical Center as well as increasing the pool of nurses in the area. Another three paramedics have just graduated from the program. Ms. Golden thanked the Regents for their support of this program, which has made a tremendous difference in this rural community.

Next, Ms. Hymel introduced Ms. Pamela Honeycutt-Mott from Kennesaw State University ("KSU").

Ms. Honeycutt- Mott said that she is a graduate of the ICAPP® Initiative program at KSU and that she is very proud to be a nurse. She said that she comes from a family of nurses and always aspired to be a nurse, but somehow along the way, she got a bit sidetracked. After earning a bachelor of arts in psychology from the University of Georgia, she wanted to go back to school for a nursing degree but the curriculum would take two and one-half years and most of the classes were taught during the day. Unfortunately, at the time, she could not accommodate daytime classes into her schedule. Instead, looking to advance herself professionally, Ms. Honeycutt-Mott earned a master of business administration degree from KSU and became a training and performance director for Wachovia Bank. She realized she was moving further away from her dream of being a nurse. In 2000, she learned that her job was moving to South Carolina, but she could not move with the job. After thinking hard about her options, she knew that she needed to follow her heart. So, she called KSU's School of Nursing and talked to Dr. David N. Bennett, Chair, and Dr. Marie Bremner, Professor of Nursing, and started reviewing her options. When they told her about the possibility of the ICAPP® Initiative accelerated program, she was so eager that she drove to the campus immediately to apply. She graduated in December 2003. Now, she is an RN on the medical surgical floor at Cartersville Medical Center and works some in the intensive care unit. She noted that Carterville is a rapidly growing suburb of Atlanta with a growing need for nurses. Ms. Honeycutt-Mott said that she loves her work and that she plans to earn a master's degree in nursing in order to obtain a faculty position in the future. She said that she would not be an RN today if it were not for this ICAPP® Initiative. She did not qualify for the HOPE Scholarship or any other scholarship programs because she had already earned a bachelor's degree. The ICAPP® Initiative program allowed her to earn her bachelor of science in nursing degree in 15 months rather than two and one-half years. The bottom line is that she could not have fulfilled her lifelong dream of becoming a nurse without the ICAPP® Initiative. She expressed her appreciation to the Board of Regents for creating and funding this program and for inviting her to speak at this meeting.

Ms. Hymel thanked the speakers for coming to the meeting and telling the Regents how this ICAPP® Initiative has changed their lives. She reminded the Regents that there are 629 more stories like theirs across Georgia, and that number does not include the number of lives that these healthcare professionals will touch during their careers. The University System and ICAPP® make wonderful things happen by "creating a more educated Georgia." Next, Ms. Hymel introduced one of the Initative's key supporters, Mr. Parker of the GHA, who said a few words and then introduced some of the ICAPP® Health Professionals Initiative's 43 private partners. She remarked that if it were not for Mr. Parker, the System might not even have this Initiative. Mr. Parker was instrumental in making the Board of Regents aware of the critical shortage of healthcare providers across Georgia.

Mr. Parker thanked Ms. Hymel and greeted the Regents. He said that he was pleased to be here to celebrate this partnership between the University System of Georgia and GHA. Hospitals are facing many difficult challenges in this day and time. One of the most difficult challenges is the workforce shortage. According to the DCH, Georgia's hospitals are facing a vacancy rate for nurses of 12%, and nursing homes are even higher at 16%. In the year 2010, it is projected that there will be a 23% vacancy rate, and in 2020, it is projected to be 40%. The national projection for 2020 is 29%. Mr. Parker said Georgia cannot meet the needs of its citizens at that rate. In 2001, Mr. Parker and others from GHA visited Chancellor Emeritus Stephen R. Portch and presented these numbers to him. He challenged his staff to come up with a proposal to begin to address these issues, and they responded quite well to his charge. The Board approved the ICAPP® Health Professionals Initiative, and the legislature funded it. Mr. Parker said that he was very pleased that Chancellor Meredith continues to work with the GHA to address this very real need. He said that the beneficiaries of this Initiative are not only its graduates, but also the citizens of the State of Georgia. Hospitals and other medical care facilities are experiencing very serious shortages in all health professions, not just in nursing. This Initiative is a very good way to address the shortages in the state. GHA is very pleased with the University of Georgia's partnership with Albany State University in bringing pharmacists to part of the state that desperately needs them. GHA applauds this effort and encourages the System to do even more to graduate pharmacists. Mr. Parker recognized others from GHA who were also in attendance at this meeting: Mr. Ken B. Beverly, President and Chief Executive Officer of Archibold Medical Center in Thomasville and past Chair of GHA; Mr. Robert Via, Administrator at Emanuel Medical Center in Swainsboro; Cary Marton, representing Taylor Health Care Group; Gaynell Miller, Assistant Vice President of Patient Care at Grady Health System in Atlanta; Cassandra Johnson, Vice President of Human Resources at Memorial Health University Medical Center in Savannah; and Kim Scroggins, Clinical Recruiter at Redmond Regional Medical Center in Rome. Mr. Parker thanked them for being in attendance, then he thanked the Regents and the Chancellor for their partnership in meeting Georgia's health professionals needs. He said this is a true private-public partnership that is working. He encouraged the Regents to build on the Initiative, so that he could come back in two years to celebrate its further success.

Ms. Hymel thanked all of the presenters and asked whether the Regents had any questions or comments. Seeing that they did not, she thanked them for their continued support of ICAPP® and its economic development efforts for the State of Georgia.

Chair Wooten thanked Ms. Hymel for this excellent report, and he thanked the ICAPP® graduates for their very compelling personal stories. He asked Mr. Parker to extend the Board's appreciation to each of the 43 partners that help make this Initiative possible. In closing, he thanked Mr. Parker for his presentation and said that this effort is just beginning here in Georgia.

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JOINT COMMITTEE MEETING: EXECUTIVE AND COMPENSATION COMMITTEE AND COMMITTEE ON FINANCE AND BUSINESS OPERATIONS, "COMMITTEE OF THE WHOLE"

Chair Wooten next convened the meeting of the Executive and Compensation Committee and the Committee on Finance and Business Operations as a Committee of the Whole to discuss the topic of presidential and Chancellor compensation. As a result of several events over the past year, the Board of Regents reached a conclusion at its June 2004 meeting and implemented an addition to policy 208 Compensation of Presidents in The Policy Manual to move all salaries and benefits being paid by private foundations to state funds. The Board did this to eliminate any doubt as to where the presidents report and to whom the presidents are responsible. The Regents forged new ground with this decision, and this is the first system in the country to do exactly what they would be discussing at this meeting. The purpose of this new direction is to change the source of funding from private foundations to state funds. This is not to be a wholesale change in amounts of compensation, with perhaps only one or two exceptions. In order not to increase the financial burden of each institution, the Chancellor and Chair Wooten will ask each foundation to send voluntarily an amount equal to what it has been providing as presidential compensation to the respective institution's general fund. Because this is a complicated matter involving deferred compensation, annuities, and so forth, the Board of Regents decided that the issue is simply too important and the task too great to be undertaken without the assistance of extraordinary expertise and counsel. As a result, Chancellor Meredith contacted consultant Raymond D. Cotton, who is a specialist in higher education and executive compensation. Mr. Cotton is Vice President for Health and Higher Education for ML Strategies, LLC ("ML Strategies") of Washington, D.C. He is a graduate of Harvard Law School. He has represented many university boards of trustees and presidents over a span of 25 years on issues similar to these. He is also a frequent speaker on programs of higher education associations, and he has written for The Chronicle of Higher Education. This project has been underway since the June meeting, and Mr. Cotton was in attendance at this meeting to give his report in two phases. First, he presented to the Board of Regents an overview of national trends in presidential compensation, market considerations of which the Board needs to be aware, various components of executive compensation, and limitations in the use of private foundations to supplement presidential pay. Second, he provided guidance on how to best structure the current presidential compensation and how to implement policy 208.

Mr. Cotton greeted the Regents and the Chancellor. He said that he had been asked to present an overview of what is happening nationally with presidential compensation and that he hoped this would be of assistance to the Regents as they make the transition from foundation funding to state funding. In addition to that, the Regents are in a transition period when the national data are showing that approximately 45% of presidents throughout the country will be retiring in the next six years. The average age of a sitting president is 56 to 58. They are generally white males; about 5% of presidents are African-American, and about 20% are female. The nation is facing a supply and demand problem with presidents in that there is an imbalance today of supply of qualified people who can do these jobs well and the increasing demand, which will continue to accelerate over the next decade or so. The rate of increase of compensation for presidents averages approximately 5.7% a year and is also accelerating. Compensation levels of presidents are in the six figures, and some are moving into the seven figures. While these numbers may sound high, the fact of the matter is that there is still plenty of room for growth. At least two of the presidents in Mr. Cotton's study currently take home over $1 million. There was a study done by the University of California, Los Angeles, Anderson School of Management that compared the total compensation of presidents of elite universities to that of the Standard and Poor's ("S&P") 500 chief executive officers ("CEOs"). The study determined that as of 2000, the presidents of universities made about 5% of what the S&P 500 CEOs made. Mr. Cotton noted that there has never been a one-for-one evaluation system for presidents of not-for-profit and for-profit organizations, but when the system is so out of balance as it is today, it could result and has resulted in the for-profit world siphoning off many talented 35-year-olds who just leave higher education for the for-profit world. Most boards today when they recruit presidents of research universities are looking for sitting presidents at other universities. Anytime they hire a person who is not a sitting president, they take a gamble. Sometimes these gambles work out, and sometimes they do not. Mr. Cotton said that he would be presenting a lot of information based upon his research of what presidents are earning throughout the country and within the University System of Georgia, but at the end of the day, the Board of Regents must exercise its own best judgment as to where it wants its own presidents to be. The ultimate determining factors will include things that are not subject to being put down in specific numbers, and that is what makes the decision-making process more of an art than a science.

Mr. Cotton said that on the national scene, boards are looking for longer-term commitments from presidents. Today, the average tenure of a president at a large research university is five years. So, boards are looking for more institutional stability and want their presidents to serve longer. On the other hand, individuals who seek these jobs are looking for job security. These positions are very difficult. They call for hard work and long hours, and people burn out very easily. The question is whether both sides can be satisfied, and Mr. Cotton said they could. Many boards around the country are looking for longer-term appointments for presidents. National data show the most popular first-term contract for a president is three years, and if the president works out, the most popular second-term contract is five years. In the University System of Georgia, the powers and duties of a president are set by the Chancellor, who carries out the goals of the Board of Regents. There are accepted ways of evaluation in higher education that are supported by all of the larger higher education associations. They encourage that the evaluator, in this case, the Chancellor, sit down with the president at the beginning of a 12-month period and they agree on a set of goals. At the end of the 12-month period, the president should submit a self-evaluation explaining how he fared during the period and which goals he accomplished and why he did not achieve others. Based on those discussions, the Chancellor can make a recommendation to the Board regarding salary increases and bonuses. Universities routinely grant tenure to presidents upon recruitment, especially if the president already has tenure at another institution. Mr. Cotton noted that Board policy prohibits presidents and the Chancellor from having tenure and suggested that the Board may want to reconsider this policy.

As higher education increasingly attracts business leaders to presidential positions, bonuses have become an integral part of presidential compensation. There are performance bonuses and signing bonuses, as well as longevity bonuses, where presidents are rewarded for staying extra years in the presidency. Unlike the for-profit world, higher education does not offer stock options. Therefore, boards often accommodate the financial interests of the president by offering deferred compensation packages. The University System of Georgia has deferred compensation plans in place for some presidents, and they seem to be working well at retaining presidents at the research universities in particular. Nonqualified plans are in place to provide a substantial risk of forfeiture. In essence, it is a requirement of the Internal Revenue Service that a person achieve a specified goal established by the board in order to be eligible for deferred compensation. Usually, the goal is serving satisfactorily for a certain number of years.

There are certain benefits that Mr. Cotton said are "tools of the trade." For example, vehicles provided to presidents are generally regarded as mobile offices because a president is often working even while driving to and from campus. Therefore, a vehicle should be considered one of the tools of the trade. Presidential homes are another such tool of the trade. Many presidents either live in a university-owned home or are given an annual housing allowance. In compensation studies performed by ML Strategies, housing allowances are always considered part of presidential compensation because they relieve a president of having to pay a mortgage and they allow the president to accrue the appreciation on the house during his/her presidency. A house that is provided by the institution, however, is not included in compensation because it is difficult to put a dollar value on that benefit. Instead, a university-provided house is considered a tool of the trade because it is often used for fund raising, recruiting, and other official functions. Vacations are considered a benefit, and most presidents do not take their full vacations and some do not take any vacation for years at a time, which is certainly not good for them. Sabbaticals are commonplace in higher education but not in other industries. They are something that presidents may look for in a job, and many systems provide them. He suggested that in order to be competitive, the Board consider providing sabbaticals to its presidents as well. He noted that in general, for every year a president serves satisfactorily, he/she earns two months of sabbatical. So, at the end of a six-year term of office, a president will have accumulated a year of sabbatical to conduct research, write a book, etc. Many presidents return to their presidential posts or as a tenured professor of the institution. This is another benefit that is not provided by the University System of Georgia, but Mr. Cotton strongly urged the Regents to consider it very carefully. Tuition assistance for children and spouses of presidents is another benefit offered to many presidents as a recruiting tool. Travel and entertainment are likewise added benefits. Mr. Cotton noted that presidents generally travel extensively for their jobs, and for that reason, travel should also be considered a tool of the trade.

Mr. Cotton stated that there is a full range of assistance offered to presidents' spouses. Some universities, such as Indiana University, provide a salary for the president's spouse. Most universities at least provide the spouse with staff support, office space, and his/her own travel budget. Spouses are the unheralded heroes and heroines for universities, remarked Mr. Cotton. They often do a lot of fund raising and community service on behalf of the university when the president does not have the time to do so, and spouses receive relatively little recognition for all that they do.

Standard life insurance is generally offered at 2.5 times a president's base salary. Mr. Cotton noted that in the University System of Georgia, presidents are given only $25,000 in life insurance. Anything above that amount, the president has to buy him/herself. Disability insurance is generally offered at a level of 60% of base salary. Boards are increasingly considering offering long-term care insurance to presidents who agree to stay until their retirement. Such policies are tax-advantaged and can be bought with a five- or ten-year fixed premium such that the president retires with a fully paid long-term care policy.

Club memberships are also often included in presidential packages. Nowadays, club memberships are often used for recruiting and fund-raising purposes. So, these memberships are also considered to be a tool of the trade by ML Strategies. Financial counseling is often offered by boards to their presidents as a benefit. Many presidents work so much that they do not have time to consider their own financial health. Relocation assistance is provided by most institutions when they recruit a president. Now, boards often offer relocation expenses when a president ends his/her service. This is another recruiting tool that gives some boards a leg up on their competition.

Traditionally, presidents of universities have served on nonprofit boards. Increasingly today, presidents serve on for-profit boards. Trustees are helping match presidents with for-profit companies, said Mr. Cotton. Clearly, there cannot be a conflict of interest, but this can be a win-win arrangement for all involved. The president earns consulting fees, but he/she is also able to watch well-managed companies operate and to bring some best practices back to the institution. Mr. Cotton stated that a president should not serve on more than two for-profit boards and the Chancellor should be the one to clear a president to serve on a board. He noted that presidents once taught as much as half a day in their areas of expertise. However, presidents today rarely find time to teach at the institution. Presidents also do not have the time they once had to perform scholarly research.

With regard to the end of the relationship between a president and a board, Mr. Cotton noted that in Hawaii, there is a situation playing out that is a perfect example of how not to do it. In this case, the board bypassed its own process to hire the president. He urged that when there is a hiring process in place, the board follow that process. In this case, the board hired an individual who interviewed very well and had been president of Trinity College in Hartford, Connecticut, a very small institution. He was brought in to be the head of a ten-campus system with a budget of almost $1 billion a year. The relationship did not work out, and for the last year or so, the president and the trustees were not even speaking to each other. Earlier this summer, the president was on the mainland for personal reasons, and while he was out of town, the board publicly fired him for cause. When asked what the cause was, the board refused to say. Both sides hired teams of lawyers. Now, the board has retracted its statement that it fired the president for cause and paid him $1.8 million, and the two have parted ways. So, this is a good example of how not to handle a termination even when a relationship is not working. Nevertheless, a board should be able to fire someone for cause if he/she engages in bad behavior, such as the commission of a crime. Mr. Cotton noted that if a president is fired for cause, it general marks the end of his/her career. So, unless there really is cause, such action generally results in law suits. Generally when things do not work out, boards invoke the without-cause severance provision, which is the standard in higher education. In that event, there is usually some level of severance provided. If a president decides to terminate his/her relationship with the institution, the board and the system head want to ensure that the president has given adequate notice to the system so that there can be an orderly transition to the next administration. Some contracts require one year's notice, which Mr. Cotton believes is too long. Other contracts require one month's notice, which he said is too short. He generally recommends six months, which is highly unusual in the private sector but entirely acceptable and advisable in higher education. Of course, there can also be outside events that end a relationship between a president and a board, such as illness, death, or closing of an institution.

Mr. Cotton stated that his data were derived from the American Council on Education ("ACE"), which has 1,800 university members; the Association of Governing Boards of Universities and Colleges (the "AGB"), the professional association of boards of trustees which includes 1,500 member boards; the College and University Personnel Association for Human Resources ("CUPA"), a professional organization with a membership of 6,100 human resources administrators; and his own research and experience. He noted that he and his staff perform approximately 20 to 30 presidential compensation studies per year, and he then distributed a copy of his most recent study to the Regents as well as a copy of a recent report from the Association of Academic Health Centers ("AHC"). He complimented the Regents on their recent policy decisions to remove foundations from the business of presidential compensation and performance and for keeping the presidents financially whole as the System makes this transition.

With regard to presidential performance, the line of authority ought to be Board of Regents, Chancellor, then presidents, said Mr. Cotton. With regard to presidential compensation, the order should be the same. If foundations are involved at all, he said they should come through the Board of Regents. Until recently, foundations were dealing directly with the presidents in terms of performance and salary supplements, such as deferred compensation plans and incentive bonuses. This typifies foundations getting into areas in which they do not belong, particularly presidential performance. It is appropriate only for the Board of Regents and the Chancellor to evaluate presidential performance, not for foundations to do so. Mr. Cotton noted that although the Board of Regents has put an end to this practice in the University System of Georgia, it is still going on in other systems around the country. The University of North Carolina ("UNC") system has recently taken a cue from Georgia and is now getting its university foundations out of the business of presidential compensation. With regard to presidential compensation, foundations had been directly involved with presidents, and this certainly does create the potential for a conflict of interest. The Board of Regents eliminated that potential with its policy actions at its June 2004 meeting.

Mr. Cotton then discussed an ML Strategies study of a cross-section of peer colleges and universities for the University System of Georgia. He noted that the Georgia Institute of Technology ("GIT") and the University of Georgia ("UGA") are in the top 20 colleges and universities in the United States. He discussed the careers and compensation packages of several presidents whose institutions also rank among the top 20. He said that there is back-and-forth recruiting occurring between public and private institutions; therefore, what private universities are paying is relevant to the University System of Georgia. For many years, presidents of public universities were not required to raise private funds, but today they are. The president of a large public university has the most difficult job in a system because of all of the constituents he/she has to satisfy on the public side and on the private side. In this comparison group, the highest paid president was Chancellor Gordon Gee at Vanderbilt University, with just over $1 million in total annual compensation. The lowest paid was Chancellor James Moeser at UNC Chapel Hill with a total compensation of approximately $315,000. Mr. Cotton noted that UNC has not gone as far as the University System of Georgia with regard to its foundation relations. While UNC has excluded foundations from presidential compensation, it has not made up the salary increases the foundations would have been willing to pay. Consequently, the second-ranking president in the UNC system was just recruited to the University of California, who paid her $100,000 more. So, it is very important for the Regents to keep an eye on the total compensation of the System's presidents as well as the total compensation of peer presidents. Mr. Cotton reported that the median total compensation for this group of peer presidents was approximately $546,000. He reminded the Regents that while that sounds like a lot of money, the job of a president is extraordinarily complex, the level of responsibility is very high, and the size of the organizations they are required to administer is generally quite substantial.

Next, Mr. Cotton presented a spreadsheet of the proposed structure of presidential compensation of System presidents in accordance with recently revised section 208 Compensation of President of The Policy Manual. He also presented data on compensation of chief executive officers of academic health centers as reported by AHC. He noted that the Medical College of Georgia ("MCG") is considered an academic health center because it contains several schools, including medical, dental, allied health, nursing, and graduate schools. ML Strategies had identified peer institutions of MCG to assemble this list.

After a brief discussion, at approximately 2:45 p.m., Chair Wooten called for an Executive Session for the purpose of discussing compensation issues. With motion properly made and variously seconded, the Regents who were present voted unanimously to go into Executive Session. Those Regents were as follows: Chair Wooten, Vice Chair J. Timothy Shelnut, and Regents Hugh A. Carter, Jr., Connie Cater, William H. Cleveland, Joe Frank Harris, Julie Hunt, W. Mansfield Jennings, Jr., James R. Jolly, Donald M. Leebern, Jr., Elridge W. McMillan, Patrick S. Pittard, Doreen Stiles Poitevint, Wanda Yancey Rodwell, Allan Vigil, and Glenn S. White. Also in attendance were Chancellor Thomas C. Meredith; the Secretary to the Board, Gail S. Weber; the Special Assistant to the Chancellor, Usha Ramachandran; the Senior Policy Advisor, Robert Watts; the Senior Vice Chancellor for Support Services, Corlis Cummings; and the Vice Chancellor for Fiscal Affairs, William R. Bowes. In accordance with H.B. 278, Section 3 (amending O.C.G.A. § 50-14-4), an affidavit regarding this Executive Session is on file with the Chancellor's Office.

At approximately 3:30 p.m., Chair Wooten reconvened the Executive and Compensation Committee and, on behalf of Regent Pittard, the Committee on Finance and Business Operations as a Committee of the Whole. He announced that no actions were taken in the Executive Session; however, in light of Mr. Cotton's presentation and in order to implement section 208 Compensation of Presidents of The Policy Manual, the Board would need to amend sections 203, 208, and 802.13 of The Policy Manual. Copies of the proposed policy revisions had been distributed. Chair Wooten asked Chancellor Meredith whether he was recommending these policy revisions pertaining to presidential compensation for the Board's approval.

The Chancellor replied that he was.

Chair Wooten then called upon Ms. Cummings to present them to the Board for its consideration and approval.

Ms. Cummings stated that section 208 was the section that the Board had added to The Policy Manual at its June 2004 meeting. The staff wanted to make sure that everyone was certain that, in terms of the money that is going to the state, whenever merit salary increases are going to be calculated, they will be based solely on the base salary amount. So, any deferred compensation or other supplements will not be included in those calculations. Section 203 pertains to when presidents leave the University System of Georgia and is commonly referred to as the "90/60 policy." Under that policy, the 90% or the 60% will not take into account any of the deferred compensation or other salary supplements. All that will be considered is the state base salary. Section 802.13 is authorizing the Office of the Senior Vice Chancellor for Support Services to create the various deferred compensation plans that will be needed to move those plans from the foundations to the state. Unfortunately, the staff cannot use the vehicles that currently exist, so a policy revision was in order.

The proposed policy revisions were as follows, with additions highlighted and deletions stricken:

208 COMPENSATION OF PRESIDENTS

The salaries (and associated fringe benefits) for University System of Georgia presidents and the Chancellor, as approved annually by the Board of Regents, shall be paid exclusively from state appropriations allocated to each institution. Effective fiscal year 2005, state appropriations shall be used to pay salary, housing allowance, subsistence allowance, and, where applicable, salary supplement, supplemental fringe benefits, deferred compensation, and any other items as approved by the Board. State appropriations will also pay for fringe benefits for presidents that are available to all employees of the University System of Georgia. Nonstate funds may pay for expenses and allowances such as civic memberships, business-related entertainment, automobile, auto allowance, maintenance and insurance for automobiles, and relocation expenses.

The annual merit salary increase paid from state funds shall be based upon the approved salary, exclusive of any allowance, supplement, or deferred compensation.

203 REMOVAL AND RESIGNATIONS OF PRESIDENTS

The president of each institution shall give the Board, through the Chancellor, three months' notice of his/ her intention to resign. The Board, through the Chancellor, shall notify the president immediately following the April monthly Board meeting of its decision not to re-elect him/her for the ensuing fiscal year. The Board may at any time remove the president of any institution for cause without giving notice; but upon request made within ten days thereafter, any president so removed shall be furnished a statement of charges against him/her, and should he/she demand it within ten days after receipt of the charges, he/she shall be given a hearing before the Board, or a committee of the Board, as the Board may determine. The action of the Board shall be final. Presidents terminated for cause shall not be eligible for reappointment as an employee of the University System.
Presidents whose resignations are accepted by the Chancellor may, upon request and at the option of the Board, be awarded a tenure or non-tenure track appointment at the rank of full professor in an institution of the University System selected by the Chancellor. Such employment shall not exceed two calendar years from the effective date of the president's resignation. Thereafter, continued employment shall be at the option of the institution.
The salary for the first year of presidents who resign and receive a professorial appointment shall be determined by the Chancellor but it shall not exceed 90% of the state-supported portion of his/her previous salary as president.
The professorial appointment of such resigned presidents for the second year shall be limited to an academic year appointment (nine months) at a salary not to exceed 60% of the state-supported portion of his/her previous salary as president.
For purposes C and D above, the salary to be paid shall be based on the approved salary exclusive of any supplement or deferred compensation.
Subject to the approval of the Chancellor, presidents whose resignations are accepted may, upon request, be granted an educational leave with pay not to exceed twelve months immediately following the date of resignation. Leave time shall be counted against the two-year (or less) appointment referred to above (BR Minutes, 1991-92, pp. 33-34).

802.13 ANNUITY PROGRAMS/DEFERRED COMPENSATION PROGRAMS

Institutions of the University System of Georgia are authorized to enter into tax-sheltered annuity plans and are authorized to enter into deferred compensation plans to make available for employees a nonforfeitable annuity contract and/or a nonforfeitable deferred compensation contract under the provisions of Internal Revenue Code, Section 403(b), and Internal Revenue Code, Section 457(b), respectively.
Institutions of the University System of Georgia are authorized to enter into nonqualified deferred compensation plans for employees of the University System of Georgia under the provisions of Internal Revenue Code, Section 403(b), and Internal Revenue Code, Section 457(f). Any contribution by the employer must be pursuant to an approved deferred compensation agreement by the Board.

Regent Leebern made a motion to accept the proposed policy revisions, which was variously seconded.

Chair Wooten noted that as Chair of the Board of Regents, he was recommending that the policy changes apply likewise to the Chancellor as determined by the Board. He then called for a vote. Motion properly made, seconded, and unanimously approved, the Board adopted the above-referenced policy changes.

Chair Wooten said that in accordance with new policy 208, the Board of Regents needed to adopt the compensation packages of the Chancellor and the following seven presidents, including the transfer of salary supplements, executive and deferred compensation, and supplemental fringe benefits to state appropriations: Michael F. Adams of the University of Georgia, G. Wayne Clough of the Georgia Institute of Technology, Carl V. Patton of Georgia State University, Daniel W. Rahn of the Medical College of Georgia, Bruce Grube of Georgia Southern University, Ronald M. Zaccari of Valdosta State University, and David A. Bell of Macon State College. Motion properly made, seconded, and unanimously approved, the Board adopted the above-referenced compensation packages and transfers to state funds.

Chair Wooten reported that in Executive Session, the Regents had discussed the current compensation for President Rahn of MCG. He then asked for a motion regarding any changes to the compensation of President Rahn.

Vice Chair Shelnut said that based upon the data presented by Mr. Cotton and comparisons of presidential compensation at other academic health centers, it was obvious to the Board of Regents that President Rahn's salary is shockingly lower than those of his peers. He made a motion to raise President Rahn's salary by $180,000 to $525,000, which would bring his salary into the median range of the peer institutions. Motion properly made, seconded, and unanimously approved, the Board adopted this motion.

At approximately 3:40 p.m., Chair Wooten adjourned the Regents into their regular Committee meetings.

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CALL TO ORDER

The Board of Regents of the University System of Georgia met again on Wednesday, August 4, 2004, in the Board Room, room 7007, 270 Washington St., S.W., seventh floor. The Chair of the Board, Regent Joel O. Wooten, Jr., called the meeting to order at 9:00 a.m. Present on Wednesday, in addition to Chair Wooten, were Vice Chair J. Timothy Shelnut and Regents Hugh A. Carter, Jr., Connie Cater, William H. Cleveland, Joe Frank Harris, Julie Hunt, W. Mansfield Jennings, Jr., James R. Jolly, Donald M. Leebern, Jr., Elridge W. McMillan, Patrick S. Pittard, Doreen Stiles Poitevint, Wanda Yancey Rodwell, Allan Vigil, and Glenn S. White.

INVOCATION

The invocation was given on Wednesday, August 4, 2004, by Vice Chair J. Timothy Shelnut. He began with a moment of silence in memory of Governor George Busbee.

Chair Wooten noted that the late Governor Busbee was a great friend of the education system in the State of Georgia and a supporter of the Board of Regents. He also at the recent time of his death, had ties to the Board, because he was the Governor to appoint the first African-American member of the Board, Regent Elridge W. McMillan in 1975. Chair Wooten remarked that the Board was glad Regent McMillan is still serving as a Regent.

ATTENDANCE REPORT

The attendance report was read on Wednesday, August 4, 2004, by Secretary Gail S. Weber, who announced that Regents Michael J. Coles and Martin W. NeSmith had asked for and been given permission to be absent on that day.

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COMMENTS FROM UNIVERSITY OF GEORGIA FOUNDATION, INC. REPRESENTATIVES

Chair Wooten stated that the Board of Regents had two special guests representing the University of Georgia Foundation, Inc. (the "Foundation") at this meeting. He introduced Lynda B. Courts, Chair of the Foundation, and James H. Blanchard, Foundation trustee and member of the Executive Committee.

On behalf of the board of trustees of the Foundation, Ms. Courts thanked the Regents for allowing her and Mr. Blanchard to address them at this meeting. She said that the trustees of the Foundation are anxious to cooperate with the University of Georgia ("UGA") administration to continue to build on the success and excellence of which they are all so proud. Ms. Courts remarked that she had seen the value of her degree from UGA increase exponentially over the years. She said that the trustees are excited about the potential and the momentum, and it is their goal to work hard as a team to make UGA one of the most preeminent public universities in the nation. Ms. Courts then called upon Mr. Blanchard to speak.

Mr. Blanchard greeted the Regents and said that it had been a pleasure for him to have an opportunity to meet numerous times over the past several months with the Chancellor and former Chair Joe Frank Harris. They have been working to forge a partnership that will create a strength and a momentum that will serve the best interests of this Board of Regents and also UGA. The spirit of cooperation that exists today is strong, sound, and unified. The trustees have one purpose: to support UGA, its students, the faculty, the administration, and the great research that is being done in a way that will best serve the state. He thanked the Regents for the dialogue and the opportunity to appear before the Board at this meeting. He thanked them for the support and encouragement the Regents have given the Foundation and UGA. He said that the Board of Regents can count on the Foundation to be its friend, ally, and partner.

Chair Wooten thanked Ms. Courts and Mr. Blanchard for their remarks. He said the Board is looking forward to a great deal of future support for the Foundation for one of the country's great research universities. He said the Board expects great things from the Foundation and UGA.

Chair Wooten said that he wanted to clarify the Board's actions from the previous day for the benefit of the press. He noted that the press coverage for the most part was excellent; however, there were a few items that needed clarification. First of all, the total compensation of the 34 presidents in the University System of Georgia will stay the same with one exception, and that is the President of the Medical College of Georgia ("MCG"). President Daniel W. Rahn had been underpaid, and he is doing an outstanding job. Secondly, all compensation for presidents will now be paid from state funds. Foundations will be asked to give the same or similar amounts that they would otherwise have been paying for the respective president's supplemental compensation. That money will go to the respective institution's general fund in support of the general mission of the institution. That money will not be directly used or allocated to pay for presidential compensation. Another point is that under state rules, no state dollars can be used for entertaining, civic clubs, and other such expenses.

As such, the Board will ask the foundations to continue to make funds available to assist the presidents in doing their jobs. Finally, salary increases in the future for presidents will continue to be based only upon the base state salaries, as is currently the case. It will not be based upon the total compensation package that includes the supplemental compensation that is now being brought over from the foundations. This means that there should be no new additional costs to the institutions. At approximately 9:15 a.m., Chair Wooten adjourned the Regents for the meeting of the Committee on Academic Affairs.

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EDUCATION SEMINAR: "AWAY GAMES: OFF-CAMPUS EDUCATION IN THE UNIVERSITY SYSTEM OF GEORGIA"

At approximately 9:35 a.m., Vice Chair Shelnut reconvened the full Board meeting and called upon the Senior Vice Chancellor for Academics and Fiscal Affairs, Daniel S. Papp, to make a special presentation to the Board. (Chair Wooten had briefly stepped out of the Board Room.)

Dr. Papp said that one of the critical elements the University System of Georgia undertakes is what happens off campus in the State of Georgia and beyond in terms of the System's educational outreach efforts. Every time there is a proposed degree program that is offered off campus, it comes before the Committee on Academic Affairs and then the full Board for approval. Dr. Papp stated that it is surprising the number and extent of off-campus education that takes place in the University System. Last fall, the System had approximately 247,000 students. This fall, the System is expecting enrollments of approximately 255,000 to 260,000, and possibly more. Those students generate about 6.4 million semester credit hours. There are roughly 9,000 faculty members in the System and a grand total of 26,000 other employees. So, the University System of Georgia is a very large system indeed with 34 institutions across all sectors. Beyond these 34 institutions, education is also offered at 216 other sites by University System faculty around the state, around the country, and even around the world. This does not include the 3,200 distance education courses, or 183,000 semester credit hours, that are offered by System faculty and taken by 51,000 "in-the-seat" students. All told, about 95% of semester credit hours are generated on campus, but about 5% are generated off campus. Dr. Papp remarked that this is a rather significant proportion. He noted that the 216 off-campus sites are located in a wide variety of places, and there are also 9 System centers where two or more institutions collaborate to offer courses. Some of these centers are rather sizeable. For example, the North Metro/Alpharetta Center, where Georgia State University ("GSU") and Georgia Perimeter College ("GPC") offer classes, has 1,500 students. The Gwinnett University Center ("GUC") is educating approximately 7,500 students via a collaboration between GPC and the University of Georgia ("UGA"). The other centers are growing as well. They are the Bartow (opening in 2005), Brunswick, Camden, Coastal Georgia, Dublin, Liberty, Robins, and Warner Robins Centers.

Dr. Papp stated that the Board of Regents does not allow institutions to start off-campus sites without going through its approval process. Under Board policy, the Chancellor approves temporary off-campus nondegree programs with no associated facilities costs. Meanwhile, the Board approves temporary off-campus instructional programs that do not have associated facilities costs as well as those off-campus programs that comprise significant parts of degree programs. However, in cases where a single course is offered at an individual high school, for example, the Board does not require the institution to get its approval. The Board approves all permanent off-campus instructional centers and programs. The Chancellor assesses the demographics, economy, efficiency, strength, and necessity of proposed off-campus instruction, as well as the appropriateness and scale of community participation. Dr. Papp noted that community participation is critically important to permanent instructional centers. The Board approves new, or expansion of existing, off-campus centers based on its 1997 Instructional Programs Off-Campus Sites Decision Rules, which are on file with the University System Office of Academic Affairs.

Also under Board policy, presidents must consult with nearby institutions before offering off-campus instruction, explained Dr. Papp. If the presidents cannot reach an agreement, the Chancellor must step in to resolve the issue. Furthermore, off-campus instruction must be the equivalent in quality and services to on-campus instruction. No more than one-fourth of an undergraduate degree and one-half of a master's degree can be offered off-campus unless a center or external degree program is authorized by the Board. Each institution must report its off-campus offerings to the Board of Regents each semester.

The impact and importance of off-campus education in the University System of Georgia is considerable, said Dr. Papp. He noted that in fiscal year 2004, 10,775 students attended classes exclusively at off-campus centers. The total number of off-campus semester credit hours generated in fiscal year 2004, not including distance education semester hours, was 333,000. Including distance education hours of approximately 183,000 constitutes approximately 7% to 8% of all education offered in the System. The growth rate for off-campus education in the University System of Georgia over the course of the past five years (30.9%) has been more rapid than the on-campus growth rate (25.8%). Dr. Papp said that this is very important for the Regents to keep in mind as they make decisions in the coming years.

Off-campus education is also important because it provides access, Dr. Papp stated. It meets the needs of current students and plans for the needs of future students. It also provides geographic access for locations around the state that are not served by an established institution. The style of learning also benefits some students who learn better via distance education modalities. Moreover, some students do not go to college for the purpose of earning a degree; some go to college just to learn a particular subject or earn a certificate. Off-campus education can offer those opportunities around the state. Off-campus instructional sites also improve the visibility of the University System of Georgia around the state, the nation, and the world. There are System off-campus instructional sites in 90 counties in Georgia; in several states outside of Georgia, including North Carolina, California, and New York; and in 16 other countries around the world. In fiscal year 2004, approximately $45 million to $50 million of formula funding and approximately $16 million of tuition funding were generated from off-campus sites. Off-campus education also allows the University System to go where the demand is, to leverage local support, and to leave when demand disappears (except for centers).

Dr. Papp reported that projections are that the University System of Georgia will be gaining approximately 10,000 to 17,000 more students per year between now and 2015, particularly in and around the Atlanta metropolitan area. The Board of Regents will have to consider its options in addressing this burgeoning demand, including adding more off campus sites at Department of Education, Department of Technical and Adult Education, government, military, and corporate facilities. The Board may consider establishing more centers around the state or expanding programs in which four-year institutions offer four-year degrees at two-year institutions ("4-4-2 programs").

Dr. Papp noted that there are many highly successful 4-4-2 programs in the System, including the programs offered by UGA at Abraham Baldwin Agricultural College ("ABAC"). In the coming months, the Committee on Academic Affairs and then the full Board will consider the evolution of a 4-4-2 Elementary Education program offered by the State University of West Georgia ("UWG") at Dalton State College ("DSC"). The staff will also be bringing forward for Board approval the establishment of two programs to be offered by Georgia Southwestern State University ("GSSU") at Middle Georgia College ("MGC"). Many 4-4-2 programs are going strong in spite of the System's loss of state funding for the special funding initiatives, but the Board may consider pushing for the reestablishment of state funding for these programs.

The Regents may also consider establishing more international sites. These programs are not luxuries, Dr. Papp stated; rather, they are necessities. If University System of Georgia graduates are able to function well in the twenty-first century, they need to understand the way the world works. However, there are many considerations, such as whether the sites should be permanent or temporary and where they should be located.

The Regents will have to consider whether to further expand distance education. Dr. Papp reported that in 1998, the System offered 898 courses via distance education to 13,569 students. In 2003, it offered 3,276 courses to 51,512 students. Not all of those students are taking courses exclusively off campus. Many are on campus and taking courses online. For the past several years, it has been possible to take the entire first two years of a college education online through the System's eCore®. A number of online degree consortia are also in place and operational. For example, the Georgia WebMBA® program has experienced maximum capacity enrollment every year that it has been offered. Over the course of the past several months, the System has created new online degree consortia in which faculty from several institutions come together to develop online degree programs. This provides greater depth of programs as well as less expensive ways to develop courses. There are two such programs currently in place: the Bachelor of Science in Information Technology and the Bachelor of Applied Sciences. Dr. Papp said that the Board may consider alternative ways to organized Web-based and distance education programs. Around the country, there are other ways that the University System of Georgia has not yet explored.

The Board of Regents may also consider mission and status changes. It may decide to create limited doctoral universities. The State of Georgia is the only state among the top 15 that does not have professionally oriented doctoral universities. The Regents may consider establishing more regional and state universities as well as more state colleges, or it may consider changing the names of institutions to better reflect their activities and locations. The Board will be looking at these issues in the course of the upcoming year. The Board may also consider increasing the size of institutions, particularly the four research universities. It may decide to create more institutions of preferred choice or establish more multi-campus institutions, which can be achieved either by combining present institutions or by creating new campuses. In some ways, the Board of Regents is already doing this, and there is a staff committee looking into what it means to be a "campus" versus a "site" or a "center." The staff will likely be coming to the Board with some recommendations within the next few months. GPC has been in talks with officials in Newton County about the possibility of establishing an instructional site there. GPC and Atlanta Metropolitan College ("AMC") are looking at sites in South Fulton County. Clayton College & State University ("CCSU") has been in discussions with Henry County officials about establishing a site in Locust Grove, and Darton College ("DC") has been looking into a site in Cordele. Dr. Papp noted that Florida Atlantic University began about 30 years ago as a small institution in Boca Raton. It now has five major campuses scattered up and down the east coast of Florida with a collective enrollment of approximately 25,000 to 27,000 students. As part of its fund-raising campaign, North Carolina State University started a new campus called its Centennial Campus, which is projected to grow to 12,500 students over the course of the next five to six years. The Board of Regents may also consider establishing more institutions. In 1932, the University System of Georgia consisted of 16 institutions. It grew to 19 in the 1950s, 27 in the 1960s, 32 in the 1970s, and 34 in the 1980s. Dr. Papp asked the Regents to consider whether a university center with 7,500 students, such as GUC, should remain a university center or become something else and whether there should also be other institutions elsewhere in the state of Georgia.

In closing, Dr. Papp said that the Board of Regents has many options to consider and decisions to make over the course of the upcoming year and into the future. He reviewed the System's options to address its rising enrollment projections. He said that off-campus education is a good way to go, but there are other options as well. With that, he asked whether the Regents had any questions or comments.

Regent McMillan asked why Georgia does not have any educational opportunities connected with its correctional facilities. He noted that such facilities could be prospective off-campus sites with large student populations of potential students to pursue GEDs and beyond.

Dr. Papp asked the Vice Chancellor for Academic, Student, and Faculty Affairs, Frank A. Butler, to respond to this question.

Dr. Butler responded that the University System of Georgia used to have educational opportunities in correctional facilities but that the financial aid opportunities had declined several years ago and, as a result, the programs also declined. He noted that recently, the System has begun new interactions with the Georgia Department of Corrections to see how it might be able to meet the needs for higher education in that area.

Chancellor Meredith stated that he had met with Commissioner James E. Donald of the Department of Corrections and that Mr. Donald was very interested in exploring educational opportunities for the inmates. However, the majority of state prisoners do not have a high school diploma. So, the prison population ready for college-level work is relatively small.

Regent McMillan remarked that it might save the state a lot of money in repeat offenses if inmates are able to learn some skills while they are incarcerated. He said that there are economic as well as ethical reasons for pursuing such options.

Dr. Papp agreed and said that his staff would look more closely at this issue.

At approximately 10:05 a.m., Chair Wooten called for a brief break. At approximately 10:15 a.m., he reconvened the full Board meeting and called for the Committee reports.

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EXECUTIVE AND COMPENSATION COMMITTEE

The Executive and Compensation Committee met on Tuesday, August 3, 2004, at 11:00 a.m. in room 7019, the Chancellor's Conference Room. Committee members in attendance were Chair Joel O. Wooten, Jr., Vice Chair J. Timothy Shelnut, and Regents Joe Frank Harris, Donald M. Leebern, Jr., Elridge W. McMillan, and Patrick S. Pittard. The Secretary to the Board, Gail S. Weber was also in attendance. In attendance for part of the meeting were Chancellor Thomas C. Meredith and Raymond D. Cotton, Vice President for Health and Higher Education for ML Strategies, LLC. Chair Wooten reported to the Board on Wednesday that the Committee had met in Executive Session to discuss compensation of the presidents and the Chancellor and that no actions were taken in Executive Session. The matter was again discussed during a joint meeting of the Executive and Compensation Committee and the Committee on Finance and Business Operations as a Committee of the Whole on Tuesday, August 3, 2004. No actions were taken in that Executive Session either, but a number of items were approved as a result of the discussion in Executive Session. (See pages 11 to 20.) In accordance with H.B. 278, Section 3 (Amending O.C.G.A. § 50-14-4), affidavits regarding these Executive Sessions are on file with the Chancellor's Office.

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COMMITTEE ON FINANCE AND BUSINESS OPERATIONS

The Committee on Finance and Business Operations met jointly with the Executive and Compensation Committee as a Committee of the Whole during the full Board meeting on Tuesday, August 3, 2004. (See pages 11 to 20.) The Committee then met in its regular session at approximately 3:40 p.m. in the Board Room. Committee members in attendance were Chair Patrick S. Pittard, Vice Chair Hugh A. Carter, Jr., and Regents William H. Cleveland, Michael J. Coles, James R. Jolly, Donald M. Leebern, Jr., Doreen Stiles Poitevint, J. Timothy Shelnut, and Glenn S. White. Also in attendance were Board Chair Joel O. Wooten, Jr., Chancellor Thomas C. Meredith, and Regents Connie Cater, Joe Frank Harris, Julie Hunt, W. Mansfield Jennings, Jr., Elridge W. McMillan, Wanda Yancey Rodwell, and Allan Vigil. Chair Pittard reported to the Board on Wednesday that the Committee had reviewed five items, two of which required action. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Revision of The Policy Manual, Section 802.0807 Family Leave

Approved: The Board approved revisions to Section 802.0807 Family Leave of The Policy Manual, as presented below, effective January 1, 2005.

Background: Subsequent to the approval by the Board of Regents of Section 802.0807 Family Leave, the federal government established the Family and Medical Leave Act ("FMLA") of 1993 (29 CFR Part 825). Since its implementation, the FMLA has had a number of procedural revisions resulting from various legal and administrative decisions. The current Board policy on family leave is based upon Georgia Laws 1992, p. 1855; O.C.G.A. Title 45, Chapter 24. This 1992 Georgia law was sunset with the passage of the federal Family and Medical Leave Act of 1993.

The Human Resources Policy Advisory Committee has prepared informational and procedural materials to assist University System of Georgia institutions in compliance with the provisions of FMLA. Included in the materials that will be distributed and disseminated to all of the Chief Human Resources Officers are 1) an overview of FMLA procedures, 2) a detailed listing of statutory definitions and procedures consistent with the federal Code of Regulations (29 CFR Part 825), 3) a list of 25 frequently asked questions and corresponding responses that will help colleagues understand the procedural intent of FMLA, and 4) a single University System of Georgia FMLA medical certification form.

Employee and institutional rights and responsibilities are identified in the University System of Georgia Human Resources FMLA Procedures document. This information will be available for access by System employees on the University System of Georgia Web site.

Previous Policy

802.0807 FAMILY LEAVE

Any employee who has been employed on a half-time basis or greater for at least twelve months is eligible for twelve work weeks of family leave during a twelve-month period commencing on the date the family leave begins. Family leave shall be unpaid leave; however, if an employee is eligible to use accumulated sick leave the employee, after obtaining permission from the employer, may do so exclusive of the twelve weeks of family leave. The employee may also utilize any accrued annual leave with the approval of the employer (BR Minutes, 1993-1994, p. 51).

Family leave shall be granted to an eligible employee in the event of:

the birth of the child of the employee;
the placement of a child with the employee for adoption;
a serious health condition of the employee's child, spouse, parent or spouse's parent necessitating the employee's presence; or
a serious health condition of the employee which renders him/her unable to perform the duties of his/her job.

With certain exceptions as indicated in the Family Leave Act (Georgia Laws 1992, p. 1855; O.C.G.A. Title 45, Chapter 24), family leave entitles the employee to be restored to the position held prior to going on family leave or to an equivalent position with equivalent benefits and pay. Family leave allows the employee to maintain his/her employee benefits during the period of leave with institutional participation in the payment of premiums.

Institutions within the University System must comply with all other provisions of Code Section 45-24 O.C.G.A. (BR Minutes, 1992-1993, pp. 134-135).

New Policy

802.0807 FAMILY AND MEDICAL LEAVE

~~Family leave shall be granted to an eligible employee in the event of:~~

the birth and care of a newborn ~~of the~~ child of the employee;
the legal placement of a child with the employee for adoption or foster care;
the care of an immediate family member (defined as the employee's spouse, child, or parent) with a serious health condition ~~of the employee's child, spouse, parent or spouse's parent necessitating the employee's presence~~; or
a serious health condition of the employee himself/herself, which renders ~~him/her~~ the employee unable to perform the duties of his/her job.

~~Institutions within the University System must comply with all other provisions of Code Section 45-24 O.C.G.A. (BR Minutes, 1992-1993, pp. 134-135).~~

To be eligible for FMLA leave, the employee must have worked for the University System of Georgia:

for at least 12 months total; and
for at least 1,250 hours during the 12-month period immediately preceding the commencement of such leave.

2. Acceptance of Gift for the Georgia Institute of Technology

Approved: The Board accepted on behalf of the Georgia Institute of Technology ("GIT") a gift-in-kind from the following corporation:

Company	Value	Items	Department
Bio-Lab, Inc.	$156,671	Ozone/bromine swimming pool sanitizing equipment	Campus Recreation Center

Background: Board policy requires that any gift to a University System of Georgia institution with an initial value greater than $100,000 must be accepted by the Board of Regents. The ozone/bromine sanitation equipment currently used at the Campus Recreation Center pools is over eight years old and in need of an upgrade to realize the substantial enhancements in ozone systems. Bio-Lab, Inc. will rebuild the four existing ozonators and will provide wireless Internet monitoring systems, brominators, and one year of wireless monitoring services. GIT will be responsible for all freight charges and electrical work associated with this upgrade. GIT has advised that there are no other material costs associated with the acceptance of this gift.

3. Information Item: Georgia Public Library Services Fiscal Year 2005 Formula Budget Presentation

The State Librarian for Georgia Public Library Services ("GPLS"), Dr. Lamar Veatch, presented information on the GPLS new directions state grant formula for Georgia's public library system. The new formula will serve as the basis for the GPLS budget request to be presented to the Board in September 2004 and future grant allocations to the state's public libraries.The state grants program is an essential element of GPLS. State grants represent 19.7% of all combined funding for Georgia's public libraries and range from under 4% for Atlanta-Fulton County to over 60% for some rural systems. State grants also represent 83% of the GPLS budget, including funding for salaries and benefits for professional librarians, maintenance and operations, books and other library materials, travel reimbursement funds, and subregional libraries for the blind and physically handicapped in 13 of the library systems.

Dr. Veatch explained there are several important reasons GPLS is seeking a new budget direction. First, the formulas are more than 40 years old. With Georgia's greatly changed demographics, present budget formulas are no longer serving their intended purpose. Second, in September 2002, the State Department of Audits and Accounts issued a Performance Audit Report on the State Grants to Public Libraries. This audit strongly recommended a complete review of the grant program. Third, the public libraries have just completed their third year with continually reduced state funding. This threw the formula further and further out of kilter. Finally, an increasingly high percentage of the total state grants fund is now devoted to the salaries portion of the program. In fiscal year 2004, this was just under 70% of the total, up from only about 50% ten years ago.

In February 2003, GPLS developed the "New Direction" work plan. The objective was to involve all of the public library systems and produce a more equitable distribution formula that addressed as many of the recognized problems as possible. All 58 of the public library directors participated in one of ten focus groups during May and June 2003. These brought together directors of similar sized and configured systems. Each group discussed the positive and negative aspects of each grant component: good points, problems, and opportunities for improvement. At the conclusion of each group meeting, the participants elected a member of their group to represent them at the next level of the study. In August, this group of ten public library directors, along with GPLS senior staff, met for three days of intensive study and debate on Sapelo Island. The Senior Vice Chancellor for External Activities and Facilities, Thomas E. Daniel and a budget analyst in the Governor's Office of Planning and Budget also participated in this retreat. This New Direction Committee met a number of additional times. Supplemented with several meetings of the entire group of 58 public library system directors, the proposed formula was developed. In addition to the countless staff hours, more than 120 hours of meeting time with these director groups were devoted to this new formula. Decisions relative to the new formula have been thoroughly discussed and recommend by this New Direction Committee. This group has now been made permanent as the State Grants Advisory Council. It will have rotating membership among the library directors.

Dr. Veatch said that fiscal year 2005 is a transition year in which GPLS will adhere to the present formulas, with some allowances. Public libraries are dealing with the full impact of the three successive years of budget cuts. So, it is critical to begin making the changes now. In some libraries, there is little money left for services and operations. GPLS will continue funding all of the state-paid positions in the Teacher Pay Scale, library books and materials at the mandated $0.35 per capita, maintenance and operations at $0.378 cents per capita, and travel funds at $375 per state-paid position. The fiscal year 2005 formula also permits "emergency" conversion of vacant positions to add to meager maintenance and operations funds.

The objectives of New Direction plan for fiscal year 2006 and beyond are as follows:

To adhere to the legislative authority of GPLS to distribute grant funds according to population and geography (§O.C.G.A. 20-2-305);
To more fairly distribute the available funding across Georgia;
To provide much greater flexibility in the expenditure of these funds at the local library system level;
To make more of the grant funds available for library materials and system operations;
To eliminate the population cap that penalizes larger systems;
To address recommendations of the audit study;
To recognize the diversity of Georgia's library systems and of the higher level of dependence upon state funding in rural Georgia; and
To secure the support of the state's public library systems.

Dr. Veatch said that he believes GPLS has met these objectives. The new system maintains the traditional grants for books and materials based on system configuration and population. It creates "System Services Grants" for infrastructure support, replacing maintenance and operations grants. It provides for a better distribution of state-paid positions. Within limits, it provides the ability to convert position funds to System Services Grants, providing greater local flexibility. It provides a more equalized distribution of per capita grants. It creates opportunities for growth of formula elements.

Dr. Veatch discussed the work still ahead for GPLS, which will submit its fiscal year 2006 budget proposal based on this new formula and work for legislative approval. He noted that GPLS must work with public library system directors and University System Office legal staff to revise the policies governing the management of these grants. GPLS must consider work to modify the applicable legislation to permit the distribution of funds to be based on economic considerations in addition to population and geography. It must also advocate for budgetary enhancements to specific elements of the formula.

In closing, Dr. Veatch introduced Gail Rogers, Director of the Cobb County Library System, and Steve Schaefer, Director of the Uncle Remus Regional Library System. Ms. Rogers and Mr. Schaefer are two of the New Direction Committee who have been instrumental in the development of the New Direction budget plan. He also introduced Greg Heid, Director of the Newton County Library and President of the Georgia Council of Public Libraries, an organization of 44 of Georgia's public library systems.

4. Information Item: Executive Session: Compensation of Presidents and Chancellor

This Executive Session was held during a joint meeting of the Executive and Compensation Committee and the Committee on Finance and Business Operations as a Committee of the Whole.

5. Information Item: Potential Policy Manual Changes

This matter was taken up by the Board of Regents during a joint meeting of the Executive and Compensation Committee and the Committee on Finance and Business Operations as a Committee of the Whole. (See pages 11 to 20).

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COMMITTEE ON REAL ESTATE AND FACILITIES

The Committee on Real Estate and Facilities met on Tuesday, August 3, 2004, at approximately 4:00 p.m. in the Board Room. Committee members in attendance were Vice Chair Allan Vigil and Regents Connie Cater, Julie Hunt, W. Mansfield Jennings, Jr., Donald M. Leebern, Jr., and Glenn S. White. Also in attendance were Board Chair Joel O. Wooten, Jr., Board Vice Chair J. Timothy Shelnut, Chancellor Thomas C. Meredith, and Regents Hugh A. Carter, Jr., Connie Cater, William H. Cleveland, Joe Frank Harris, James R. Jolly, Elridge W. McMillan, Patrick S. Pittard, and Doreen Stiles Poitevint. Vice Chair Vigil reported to the Board on Wednesday that the Committee had reviewed 17 items, 14 of which required action. With motion properly made, seconded, and unanimously adopted, the Board approved and authorized the following:

1. Naming of the Waldo W. E. Blanchet Building, Fort Valley State University

Approved: The Board approved the naming of the Computer Technology and Mathematics Building at Fort Valley State University ("FVSU") the "Waldo W. E. Blanchet Building" in honor of Waldo W. E. Blanchet.

Understandings: Waldo W. E. Blanchet served as Head of the Science Department and Dean of the Fort Valley Normal and Industrial School from 1932 to 1939. When Fort Valley State College was formed in 1939, Dr. Blanchet was appointed as Administrative Dean and Professor of Physical Science. In 1966, Dr. Blanchet succeeded Cornelious Troup as the third President of Fort Valley State College.

Dr. Blanchet's commitment to outreach and collaboration between the college and the community was unparalleled. During his presidency, the college added several new facilities, including the Lyons Student Center, the Cozy L. Ellison Building, the Wilson–Robert Building, the Hunt Memorial Infirmary, and the Josephine Lewis Hall Dormitory. Dr. Blanchet retired in 1973.

Dr. Blanchet died in July 1998.

2. Naming of the Penny and Roe Stamps Student Center Commons, Georgia Institute of Technology

Approved: The Board approved the naming of the renovated student center commons at Georgia Institute of Technology ("GIT") the "Penny and Roe Stamps Student Center Commons" in honor of Mrs. Penny and Mr. Roe Stamps.

Understandings: Through their generous contributions of personal service and financial resources, Penny and Roe Stamps have touched the entire GIT community. In the early 1990s, Mr. Stamps served on the Ivan Allen College Executive Advisory Board and for a number of years, the E. Roe Stamps Award for Excellence in Teaching has recognized Ivan Allen College faculty. Mr. Stamps also joined the School of Industrial and Systems Engineering Advisory Board in 1999. He has been a leader on the board of trustees of the Georgia Tech Foundation, Inc. and in both national and regional fund-raising campaigns for GIT.

The Stamps family has deep and abiding ties to GIT. Penny and Roe Stamps and the Stamps Family Foundation together have contributed $3,745,000 to assist GIT with academic scholarships and projects ranging from athletic fields renovations to health center construction. In June 2003, Penny and Roe Stamps committed $1,445,000 to assist in renovating the space vacated by the GIT bookstore's move to Technology Square. The vacated facility was reconfigured as a student center commons.

Born in Macon, Roe Stamps founded one of the country's largest and most successful investment firms and has served as a director of a number of private and public companies. Mr. and Mrs. Stamps have a son and a daughter.

3. Rental Agreement, Fortson Drive, Hampton, University of Georgia

Approved: The Board authorized the execution of a rental agreement between Fortson Youth Training Center, Inc., Landlord, and the Board of Regents, Tenant, for approximately 77 acres and 40,887 square feet of camp and recreation space located on Fortson Drive, Hampton, Georgia, for the period August 4, 2004, through June 30, 2005, at a monthly rent of $1,500 ($18,000 per year) with options to renew on a year-to-year basis for five consecutive one-year periods at the same rent rate, for the use of the University of Georgia ("UGA").

Authorization to execute this rental agreement was delegated to the Vice Chancellor for Facilities.

The terms of this rental agreement are subject to review and legal approval of the Office of the Attorney General.

Understandings: Since 1973, campers in the South Atlanta/Griffin area have utilized Truitt-Fulton 4-H Center in College Park, Georgia. The lease with Fulton County has expired.

Fortson 4-H Center (the "Center") includes 26 buildings, located in a wooded area with a small lake in Henry and Clayton Counties and includes a dining hall, education center, cabins, camp houses, and swimming pool. The camp and recreation center offers ample outdoor recreation activities, an adequate swimming pool, and better sleeping and dining facilities for UGA's programs.

The Center will be used for 4-H summer camp, 4-H environmental education, other 4-H activities, and other educational and recreational purposes approved by Georgia 4-H.

Construction began on the Center in the 1960s and continues today by a local nonprofit organization that owns and has been operating the camp. The Landlord will continue to fund construction at the camp as funds become available.

Rent and operating expenses will be paid entirely from user-generated fees. Operating expenses, including maintenance, repair, insurance, pest control, janitorial services, and utilities, are estimated to be $59,500 per year.

UGA's Cooperative Extension Service operates four other 4-H Centers and their programs in Georgia. These are the Rock Eagle 4-H Center near Eatonton, Wausega 4-H Center in Dahlonega, the Burton 4-H Center at Tybee Island, and the Jekyll Island 4-H Center.

4. Rental Agreement, 650 Ethel Street, Georgia Institute of Technology

Approved: The Board authorized the execution of a rental agreement between VLP 2, LLC. (the "LLC"), Landlord, and the Board of Regents, Tenant, for approximately 32,500 square feet of warehouse space for the period September 1, 2004, through June 30, 2005, at a monthly rent of $21,664.46 per month ($259,973.52 per year/$8 per square foot per year) with options to renew on a year-to-year basis for six consecutive one-year periods, with rent increasing 3% per year, for the use of the Georgia Institute of Technology.

Authorization to execute this rental agreement was delegated to the Vice Chancellor for Facilities.

The terms of this rental agreement are subject to review and legal approval of the Office of the Attorney General.

Understandings: The facility is within close proximity to campus and will permit consolidation of storage for Auxiliary Services, Facilities, and the Library Archives. The facility provides 24 parking spaces for Auxiliary Services vehicle storage.

Operating expenses, including utilities, janitorial services, and pest control, are estimated to be $18,000 per year.

5. Rental Agreement, 106 Branbury Road, Oxford, England, University of Georgia

Approved: The Board authorized the execution of a rental agreement between the University of Georgia Foundation, Inc., Landlord, and the Board of Regents, Tenant, covering approximately 5,443 square feet located at 106 Branbury Road, Oxford, England, for the period July 1, 2004, through June 30, 2005, at a monthly rent of $15,208.16 ($182,497.92 per year/ $33.53 per square foot per year) with options to renew on a year-to-year basis for four consecutive one-year periods with rent increasing 4% per year for the use of the University of Georgia.

Authorization to execute this rental agreement was delegated to the Vice Chancellor for Facilities.

The terms of this rental agreement are subject to review and legal approval of the Office of the Attorney General.

Understandings: In August 1999, the Board approved renting this facility. The last option period authorized has expired.

The need for housing and the need for continued use of this facility has been assessed. This facility is still required for student housing for the Studies Abroad Program (the "Program") and permits this Program to be operated year-round.

Housing will be provided for up to 30 students at a time. The students are charged a single fee, which includes housing, for the Program. Funding for this agreement is from these student fees.

Operating expenses, including utilities, janitorial services, maintenance, taxes, and insurance, are estimated to be $87,000 per year.

At the end of the term of this agreement, the need for continued use of this facility and alternatives to renting this facility for housing will be assessed for the long-term needs of the Program.

6. Amendment to Subrental Agreement, University Lofts, Georgia State University

Approved: The Board authorized the execution of an amendment to the subrental agreement between University Lofts, LLC (the "LLC"), Sublandlord, and the Board of Regents, Subtenant, for approximately 231 apartments containing 397 bedrooms and including approximately 362 parking spaces located at 135 Edgewood Avenue, Atlanta, Georgia, to include options to renew on a year-to-year basis for 18 additional consecutive one-year periods followed by an additional three-month option period with rent increasing 1% per year.

Authorization to execute this amendment to the subrental agreement was delegated to the Vice Chancellor for Facilities.

The terms of this amendment to the subrental agreement are subject to review and legal approval of the Office of Attorney General.

Understandings: In November 2003, the Board approved renting this facility for six months with 9 one-year options.

As consideration for the additional option periods, the Landlord will currently assign its remaining interest in the lease, at the end of the last option period exercised by the Board of Regents, to the LLC.

This amendment supports the overall housing plan for GSU presented to the Board by President Carl V. Patton in September 2003 and permits consideration of potential housing at the Piedmont-Ellis location.

All remaining terms of the subrental agreement as approved by the Board in November 2003 remain in effect.

Note: During the Committee meeting, staff clarified that The University Financing Foundation ("TUFF") will currently assign its remaining interest in the lease at the end of the last option period exercised by the Board of Regents to the LLC.

7. Rental Agreement, North Parking Deck, Kennesaw State University

Approved: The Board authorized the execution of a rental agreement between Kennesaw State University Foundation, Inc. (the "Foundation"), Landlord, and the Board of Regents, Tenant, for a parking deck with approximately 1,538 parking spaces for the period commencing on the first day of the first month after the Foundation obtains a certificate of occupancy, but no earlier than September 1, 2004, and ending on the following June 30 at a rent not to exceed $92,141 per month ($1,105,697 per year annualized) with options to renew on a year-to-year basis for up to 25 consecutive one-year periods (the total not to exceed 25 years from the commencement date) at the same rent rate, for the use of Kennesaw State University ("KSU").

Authorization to execute this rental agreement was delegated to the Vice Chancellor for Facilities.

The terms of this agreement are subject to review and legal approval of the Office of the Attorney General.

Understandings: In November 2003, the Board approved a ground lease for the North Parking Deck. At the time, a rental agreement was not anticipated.

Subsequent review has indicated several advantages to renting the North Parking Deck. More favorable financing can be acquired. Bond insurance premiums will be reduced. The parking operation of KSU will be enhanced by single management of all parking decks. The North Parking Deck will be available to all students of KSU.

Construction of the North Parking Deck is anticipated to be completed in August 2004.

8. Ground Lease and Rental Agreements, Phase II Housing, State University of West Georgia

Approved: The Board declared approximately 6.7598 acres of real property located on the campus of State University of West Georgia ("UWG"), Carrollton, Georgia, no longer advantageously useful to UWG or other units of the University System of Georgia but only to the extent and for the purpose of allowing this real property to be leased to West Georgia Foundation for Student Housing, LLC (the "LLC") for the purpose of constructing and owning student housing and parking for UWG.

The Board authorized execution of a ground lease between the Board of Regents, Lessor, and the LLC, Lessee, for the above-referenced approximately 6.7598 acres of real property on the campus of UWG, Carrollton, Georgia, for a period not to exceed 25 years with an additional construction period of not more than 2 years with the option to renew for up to an additional 5 years, should there be debt outstanding at the end of the original ground lease term, for the purpose of constructing student housing, which will contain approximately 602 student housing beds, parking for approximately 126 cars, and site amenities.

The Board authorized the execution of a rental agreement between the LLC, Landlord, and the Board of Regents, Tenant, for approximately 602 student housing beds, approximately 126 parking spaces, and site amenities for the period commencing on the first day of the first month after LLC obtains a certificate of occupancy, but no earlier than August 1, 2005, and ending on the following June 30 at a rent not to exceed $138,490 per month ($1,661,868 per year annualized) with options to renew on a year-to-year basis for up to 25 consecutive one-year periods (the total not to exceed 25 years from the commencement date) with rent increasing no more than 3% for each option period exercised.

The Board declared approximately 3.6564 acres of real property on the campus of UWG to be no longer advantageously useful to UWG or the University System of Georgia but only to the extent and for the purpose of granting a nonexclusive easement to the LLC for parking and access for the duration of the ground lease.

The Board authorized the execution of a nonexclusive easement with the LLC for the above-referenced tract of land.

Authorization to execute the rental agreement was delegated to the Vice Chancellor for Facilities.

The terms of these agreements are subject to review and legal approval of the Office of the Attorney General.

Understandings: In May 2001, President Beheruz N. Sethna presented to the Board of Regents, as an information item, UWG's housing concept proposal, which illustrated the need to obtain new student housing by constructing student housing in three phases using a privatization process.

In October 2002 and February 2003, the Board authorized 612 student housing beds that will become available in fall 2004.

At the end of the term of the ground lease, the land, all improvements, and any accumulated capital reserves will become the property of the Board of Regents.

9. Easements for High-Voltage Transmission Lines, Georgia Institute of Technology

Approved: The Board declared approximately 0.297 acre of real property on the campus of Georgia Institute of Technology ("GIT"), Atlanta, Georgia, no longer advantageously useful to GIT or other units of the University System of Georgia but only to the extent and for the purpose of granting a nonexclusive easement to Georgia Power Company ("Georgia Power") for the purpose of constructing and operating a high-voltage transmission line.

The Board authorized the execution of a nonexclusive easement with Georgia Power for the above-referenced tract of land.

The Board declared approximately 0.059 acre of real property on the campus of GIT, Atlanta, Georgia, no longer advantageously useful to GIT or other units of the University System of Georgia but only to the extent and for the purpose of granting a nonexclusive easement to Georgia Power for the purpose of constructing and operating a high-voltage transmission line.

The Board authorized the execution of a nonexclusive easement with Georgia Power for the above-referenced tract of land.

The Board declared approximately 0.010 acre of real property on the campus of GIT, Atlanta, Georgia, no longer advantageously useful to GIT or other units of the University System of Georgia but only to the extent and for the purpose of granting a nonexclusive easement to Georgia Power for the purpose of constructing and operating a high-voltage transmission line.

The Board authorized the execution of a nonexclusive easement with Georgia Power for the above-referenced tract of land.

The terms of these easements are subject to review and legal approval of the Office of the Attorney General.

Understandings: Georgia Power desires to construct a new high-voltage transmission line to increase capacity. These easements will permit alignment of this transmission line on the boundary of the portion of the GIT campus known as the North Avenue Research Area.

Planning is in progress for a substation in this area to serve the GIT campus, which will be presented to the Board for consideration.

Georgia Power will pay $159,430 consideration for these easement areas. Additional consideration is a potential avoidance of $3 million for installation of a dedicated transmission line back to a remote power grid distribution point should a substation be developed in this area.

10. Acquisition of Property, 670 North Indian Creek Drive, Clarkston, Georgia Perimeter College

Approved: The Board authorized the purchase of approximately 1.38 acres of real property located at 670 North Indian Creek Drive, Clarkston, Georgia, at a purchase price of $250,000 from Samuel Velazquez for the use and benefit of Georgia Perimeter College ("GPC").

The legal details involved with the acquisition of this property will be handled by the Office of the Attorney General.

Understandings: The property includes a 1,764-square-foot, single-story wood-frame residence, which is currently used as a church.

This acquisition was previously approved by the Board in November 2002, but the sale did not close. The value of the property has appreciated as indicated by updated appraisals.

Three independent appraisals of the property are as follows:

Appraiser	Appraised Value	Average
Rains & Company, Conyers	$250,000	$253,333
B.B. Knox Company, Suwanee	$250,000
Clower, Kirsch & Associates, Lawrenceville	$260,000

A Phase I Environmental Assessment has been completed and indicates there are no significant environmental issues. There are no restrictions on the acquisition, and there are no known easements or restrictions on the property.

This acquisition is consistent with the GPC master plan.

Funding for the acquisition and operating expenses will be from general operating funds.

11. Authorization of Project, "Business Continuity Data Center," Georgia Institute of Technology

Approved: The Board authorized the Business Continuity Data Center (the "Center") project at Georgia Institute of Technology ("GIT") with a total project budget of approximately $4.6 million to be funded from GIT institution funds.

Authorization of this project is subject to completion of an environmental site assessment indicating no significant problems or, if environmental problems are present, that said problems be mitigated prior to beginning construction, remodeling, or renovation.

Understandings: The project involves significant remodeling and renovation of approximately 9,800 assignable square feet at 811 Marietta Street, Atlanta, Georgia, as well as external network and electrical systems upgrades.

The Rich Building currently houses the GIT primary service functions of the GIT Office of Information Technology. The Center will provide a back-up service center to ensure the availability of the information technology support network for GIT.

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Meeting Minutes - August 2004