March 9, 2012

REGULAR MEETING OF THE BOARD OF TRUSTEES OF WESTERN CAROLINA UNIVERSITY

Room 510, H.F. Robinson Building March 9, 2012

The Board of Trustees of Western Carolina University met in regular session on March 9, 2012 in Room 510 of the H.F. Robinson Building. The meeting was called to order at 9:30 a.m. by Chair MacNeill.

ATTENDANCE
The following members of the Board were present: Mrs. MacNeill, Mrs. Williams, Mr. Broadwell, Mrs. Coward, Mr. Metcalf, Mrs. Kaemmerling, Mr. Little, Mr. Forsyth, Mrs. Battle, Ms. Saunooke, Mrs. Wellmon, and Mr. Eaves.

The following members of the Board were absent: Mr. Townsend.

Others present: Chancellor Belcher; Dr. Lofquist, Interim Provost; Mrs. Lynch, Chief of Staff; Vice Chancellors Metcalf, Miller, and Edwards; Mr. Fowler, CIO; Ms. Lochner, General Counsel; Mr. Eaton, Athletic Director; Ms. Woody, Budget Officer; Mrs. Wong, Human Resources Director; Ms. Ellison, Smoky Mountain News; Mr. Hermey Schlesinger, Senior Customer Relationship Manager, Ellucian; Dr. Szabo, Associate Professor in History; Mr. Studenc, Senior Director of News Services; Mr. Hudson, Alumni Association President; Mr. Bradshaw, Foundation Board Chair; Dr. Wargo, Assistant Vice Chancellor for Institutional Planning and Effectiveness; Mrs. Ashe, Administrative Assistant; and Ms. Welch, Assistant Secretary to the Board.

SWEARING-IN OF NEW BOARD MEMBER
Mrs. Wellmon was sworn in by Ms. Welch. Mrs. MacNeill welcomed Mr. Hudson, Mr. Bradshaw and Dr. Szabo.

ETHICS STATEMENT
Mrs. MacNeill read the following: “As Chair of the Board of Trustees, it is my responsibility to remind all members of the Board of their duty under the State Government Ethics Act to avoid conflicts of interest and appearances of conflict of interest as required by this Act. Each member has received the agenda and related information for this Board of Trustees’ meeting. If any Board member knows of any conflict of interest or appearance of conflict with respect to any matter coming before the Board of Trustees at this meeting, the conflict or appearance of conflict should be identified at this time.”

There were no conflicts disclosed.

STATEMENTS OF ECONOMIC INTEREST
Mrs. MacNeill stated that we received twelve evaluations of the Statement of Economic Interest filed by the members of the Board of Trustees from the State Ethics Commission. There were five Board members with no potential for a conflict of interest. There were seven Board members with the potential for a conflict of interest as follows:

Mrs. Grace T. Battle: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service on this entity. Mrs. Battle will fill the role of an At-Large member on the Board. She is employed by World Fiber Technologies, Inc., an electrical contracting company. Her spouse owns threshold amounts of stock in and is an officer or member of numerous real estate-related LLCs and other privately-held companies. In light of these interests, Mrs. Battle should exercise appropriate caution in the performance of her public duties should any entity in which her spouse has a financial interest come before the Board for official action or otherwise seek to conduct business with the Western Carolina University. This would include recusing herself to the extent that those interests would influence or could reasonably appear to influence her actions.

Mr. Freeman E. Broadwell, Jr.: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service in this position. Mr. Broadwell is Chairman and CEO of HomeTrust Bank. He has disclosed ownership of a threshold amount of stock in numerous public companies that could seek to do business with the University. In light of this interest, Mr. Broadwell should exercise appropriate caution in the performance of his public duties should issues regarding the entities in which he has a financial interest come before the Board or otherwise seek to do business with the University. This would include recusing himself to the extent that his interests would influence or could reasonably appear to influence his actions.

Mrs. Carolyn L. Coward: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service in this position. Mrs. Coward is an attorney with Van Winkle Law Firm and her husband is an attorney with Coward, Hicks and Siler, P.A. Each of these law firms may seek to do business with the University. In light of this interest, Mrs. Coward should exercise appropriate caution in the performance of her public duties should issues regarding Van Winkle Law Firm or Coward, Hicks and Siler, P.A. come before the Board or otherwise seek to do business with the University. This would include recusing herself to the extent that her interests would influence or could reasonably appear to influence her actions.

Mr. William F. Forsyth, Jr.: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service on this entity. Mr. Forsyth has disclosed that he owns a threshold amount of stock in United Community Bank which could seek to do business with the University. In light of this interest, Mr. Forsyth should exercise appropriate caution in the performance of his public duties should issues regarding United Community Bank come before the Board for official action or otherwise seek to do business with the University. This would include recusing himself to the extent that his interests would influence or could reasonably appear to influence his actions.

Mr. Stephen M. Metcalf: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service in this position. Mr. Metcalf is President of The Policy Group, Inc, a lobbying firm and he is a registered lobbyist in the State of North Carolina. In light of this interest, Mr. Metcalf should exercise appropriate caution in the performance of his public duties should issues regarding the entities for which he is a registered lobbyist come before the Board or otherwise seek to do business with the University. This would include recusing himself to the extent that his interests would influence or could reasonably appear to influence his actions.

Mrs. Brenda C. Wellmon: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service on this entity. Mrs. Wellmon will fill the role of an At-Large member on the Board. She is on the Western Carolina Foundation Board of Directors. As such, she has the potential for a conflict of interest and should exercise appropriate caution in the performance of her public duties should the Foundation come before the Board for official action. This would include recusing herself to the extent that this interest would influence or could reasonably appear to influence her actions.

Mrs. Teresa H. Williams: We did not find an actual conflict of interest, but found the potential for a conflict of interest. The potential conflict identified does not prohibit service in this position. Mr. Williams disclosed that she and her husband own a threshold amount of stock in Bank of America, Bank of Commerce and Duke Energy which are companies that could seek to do business with the University. Further, her husband is employed with Duke Energy. In light of this interest, Mrs. Williams should exercise appropriate caution in the performance of her public duties should issues regarding the entities in which she has a financial interest come before the Board or otherwise seek to do business with the University. This would include recusing herself to the extent that her interests would influence or could reasonably appear to influence her actions.”

APPROVAL OF MINUTES
Mr. Broadwell moved that the minutes of the December 8, 2011 Discussion of Interest; the minutes of the December 9, 2011 regular meeting; the minutes of the December 12, 2011 emergency telephone meeting of the Executive Committee; the December 21, 2011 special telephone meeting of the Executive Committee; and the January 31, 2012 special meeting of the Executive Committee be approved. Mrs. Kaemmerling seconded the motion, and it was approved unanimously.

CLOSED SESSION
Mr. Broadwell moved that the Board go into closed session to consider the qualifications, competence, performance, character, fitness, conditions of appointment, or conditions of initial appointment, of a public officer or employee or prospective public officer or employee; to consult with our attorney to protect the attorney-client privilege to discuss a legal issue; to consult with our attorney to consider and give instructions concerning the handling or settlement of a potential or actual claim, administrative procedure, judicial action, mediation or arbitration; and to consult with our attorney to consider and give instructions concerning an existing lawsuit titled The Estate of Ja’Quayvin Smalls v. Smith et. al.; an existing lawsuit titled Dr. Donald Jensen v. McMahan, et. al.; an existing lawsuit titled Dr. John Patterson v. Stone et. al.; and an existing lawsuit titled Dr. John Patterson v. WCU and UNC. Mr. Forsyth seconded the motion, and it was approved unanimously.

Dr. Belcher asked Dr. Lofquist and Ms. Lochner to stay for the closed session.

RETURN TO OPEN SESSION
Mrs. Battle moved that the Board return to open session. Mr. Forsyth seconded the motion, and it was approved unanimously.

REPORT OF THE ACADEMIC AFFAIRS AND PERSONNEL COMMITTEE
Mr. Metcalf stated that there is a bill before the legislature (Senate Bill 575) which would transfer the authority for personnel management of current staff employees from the State Personnel Commission to the UNC Board of Governors. In anticipating such a move happening, UNC System employees are currently drafting the guiding principles for the development of a unified personnel system for all university employees.

Mr. Metcalf moved on behalf of the committee to adopt the recommendations regarding tenure, promotion and emeritus status. It was approved unanimously. (TENURE, PROMOTION AND EMERITUS INFORMATION ON FILE WITH MINUTES MATERIALS IN TAB C-2)

Mr. Metcalf mentioned that interviews are almost complete for the College of Business Dean search, and we expect visitors to campus within the month. The Arts and Sciences Interim Dean, Gibbs Knotts, is leaving, and the campus is conducting an internal search for an interim dean. Mr. Metcalf further mentioned that Scott Higgins, Dean of the Graduate School and Research has announced his retirement and that an interim dean will likely be appointed.

REPORT OF THE ADMINISTRATION, GOVERNANCE AND TRUSTEESHIP COMMITTEE
Mrs. Kaemmerling moved on behalf of the committee to establish a Chancellor’s Residence Annual Repair and Maintenance Review Subcommittee. The subcommittee would review annual inspections done by Facilities and the State Construction Office, and Facilities would conduct a walk-through of the Residence with the subcommittee to identify potential repairs and/or enhancements. Facilities will submit an estimated cost along with the identified repairs/enhancements needed. The motion was approved unanimously.

Mrs. Kaemmerling moved on behalf of the committee to amend the tailgating policy. The motion was approved unanimously. (TAILGATING POLICY ON FILE WITH MINUTES MATERIALS IN TAB D-3)

Mrs. Kaemmerling reported on changes to credit card payments. A communications plan is underway to notify students and parents that WCU will no longer accept Visa for tuition and fee payments.

Mrs. Kaemmerling also reported on admissions and enrollment. At this point in the new student recruitment cycle, WCU is on track to achieve our undergraduate enrollment targets (1,600 freshmen) for Fall 2012. We have received more than 15,000 applications already – the most applications in the history of WCU.

Mrs. Kaemmerling further reported on the week of activities for the week of Chancellor Belcher’s Installation. The activity calendar can be found on the WCU website.

Mrs. Kaemmerling asked Mr. Eaves to give a report on behalf of the Student Government Association. Mr. Eaves reported that he gave a State of the University address which was broadcast live on TV 62. He spoke on behalf of all students regarding the importance of protecting the quality of education at the Board of Governors meeting. SGA sent three buses of students to Asheville for the basketball championship game. Mr. Eaves mentioned that SGA elections are gearing up. He stated he has had a great experience, coming into a welcoming environment on this Board. Mr. Eaves concluded by stating that this University has a bright future.

REPORT OF THE FINANCE AND AUDIT COMMITTEE
Mr. Broadwell stated that Ms. Donna Allen, Audit Manager from the State Auditor’s Office, presented to the committee the 2011 Financial Audit Report for the University. The report had no audit findings and she complimented the staff on their excellent work. The auditors identified two adjustments to the financial records for 2010-2011 and these have been recorded.

Mr. Broadwell updated the Board on tuition and fees. The Board of Governors, at their February meeting, approved the tuition and fee proposal from the University that included a 6.5% increase in base tuition along with 15% of a “catch-up” amount for the 2012-2013 academic year. The approved proposal results in a $399.00 tuition increase to a NC undergraduate student. The University had identified $1,360.00 as the “catch up” amount and had proposed to implement this over a five year period on a graduated scale of 15% first year, 20% second year, 25% third year, 25% fourth year, and 15% the fifth year. The Board of Governors also approved the second year (2013-2014) of our proposed “catch-up” amount which totaled $272.00. The University will be given the opportunity to request an additional 6.5% maximum increase for that year, should we choose to do so, in accordance with the current Board of Governors four year plan.

Mr. Broadwell asked Mr. Bobby Justice, Mr. David Steinbicker and Mr. Greg Plemmons to present the financial statements of the University for the year ended June 30, 2011. Both reports reflected no significant findings.

Mr. Broadwell reported on the 2012-2013 budget update. Excerpts were presented from the Board of Governors 2012-13 Budget Priorities that would have an impact on the University. The priorities that would have a positive effect for WCU include restoration of the management flexibility reduction, funding of enrollment growth, financial aid increases, faculty recruitment and retention funding, increases in distinguished professorships, and campus safety and security funding. The Board of Governors supports a meaningful salary increase for all employees.

Mr. Broadwell stated that Chancellor Belcher reported to the committee the successful lease approval and signing for the Biltmore Park Space. Dr. Belcher and President Ross recently visited Biltmore Park accompanied by Mr. Jack Cecil. President Ross was very impressed with our selection of site and potential for growth. Mr. Edwards reported that the construction drawings for the space are complete and a contract for the space build out will be awarded by March 31st. Construction is scheduled to begin April 2nd with a completion date of July 31st. Our lease is effective August 1st.

Mr. Broadwell updated the Board on two major capital projects. The Health and Human Sciences building is tentatively scheduled to be completed by April 15th and be in use by fall semester 2012. The Harrill Hall renovation is continuing and is currently 55% complete. He further reported that the contract for the replacement of the elevators in the H.F. Robinson building has been signed and work will begin this summer.

Mr. Broadwell reported that the internal auditor has completed an audit of University compliance to Policy # 54 – Conflicts of Interest and Commitment/External Professional Activities for Pay and reported her findings and corrective action. To assure the University’s compliance with this policy and satisfy her recommendations, she is working with the appropriate offices to document their actions which comply with the policy requirements. Additionally, the internal auditor completed an audit of inaccurate recording of compensatory time earned and taken off by EPA employees in the Admission Office. The Admission Office is working with Human Resources to develop office procedures and policies to comply with proper time recording.

COMMENTS BY CHAIR MACNEILL
Mrs. MacNeill explained that all of the system Board chairs met with President Ross at his home. President Ross mentioned the great progress that has been made with audits and financial reports in all the institutions. Mrs. MacNeill stated that President Ross said that the financial situation is the new reality for all of us. He hopes that we have a break to stabilize the institutions and have time to adjust to the cuts we have taken. He stated that General Administration is willing to help each institution with the legislature.

Mrs. MacNeill reported that, as Board Chair, she serves on the Foundation Board. We are looking for ways to work and meet together in the future. Together we can be even more effective. These have been tough years with our investments. In June, we want to have some joint meetings with the Foundation Board.

Mrs. MacNeill thanked Mr. Eaton for the breakfast presentation this morning. She asked that if anyone has ideas for breakfast programs or Discussion of Interest topics, please let her or Ms. Welch know.

Mrs. MacNeill reminded Board members that the Statement of Economic Interest is due by April 15. Please send a copy to Ms. Welch for General Administration. She also reminded the Board that ethics training is required every other year.

Mrs. MacNeill stated that the Board is very proud of Mr. Eaves. She also stated that he has worked with the Board in a professional way. Mrs. MacNeill told Mr. Eaves “You are the future and the reason that we work so hard at this institution.”

COMMENTS FROM CHANCELLOR BELCHER
Dr. Belcher mentioned that it is our hope to bring the Strategic Plan to the Board for endorsement in June. He asked Ms. Wargo to give the Board an update on the status of the Strategic Plan.

Dr. Belcher explained the new budget process that he has initiated this year. The campus has been engaged in the budgeting process and campus-wide budget hearings were held. There was also a budget advisory committee of faculty, staff, and students. In the next couple of weeks, the Chancellor’s Leadership Council and Budget Advisory Committee will spend time hearing budget priorities for the campus. This has been a massive education for the campus.
Dr. Belcher mentioned that State revenues are coming in a bit ahead of budgeting forecasts. We have heard nothing about reversions and cuts at this time. April 15th is the key date.

Dr. Belcher reported that the State has pushed the University system to look at outcomes measurements, moving toward a performance funding model. He explained the draft of this model.

Dr. Belcher stated that our Bachelor of Science in Engineering degree was approved by the Board of Governors. This will allow us to build concentration levels in various forms of engineering that relate to the actual needs of business and industry. We have consolidated our co-curricular offerings into a single location in Biltmore Park.

Dr. Belcher offered some bragging points: We rank sixth in the nation in the numbers of students whose undergraduate research has been accepted at the National Conference of Undergraduate Research. Ron Rash’s novel is being adapted into a film. Catherine Carter has published a new book of poetry. Our new Athletic Director and football coach have brought excitement to campus, as did our men’s basketball team. Danny Williamson took the indoor track and field team to the Southern Conference championship. WCU won the Battle of the Plug, an energy conservation contest. He stated that reviewing tenure and promotion dossiers was a very rewarding experience for him, seeing the passion that our faculty have for our students and for community engagement.

COMMENTS FROM THE FACULTY SENATE
Dr. Szabo reported that she is sorry that Dr. McNelis is leaving as chair. The faculty is grateful to work with the leadership that we have now. The Senate has passed a new policy on effective teaching. We are losing some of our best faculty due to salaries. Dr. Szabo stated that one of the concerns is that the faculty needs help to improve its morale. Mrs. MacNeill added that the Board would like to engage more with the faculty.

COMMENTS FROM THE ALUMNI ASSOCIATION PRESIDENT
Mr. Hudson introduced himself to the Board as the new Alumni Association President. He added that the new election process is working well and producing quality board members. The Alumni Board played a key role in the Chancellor’s Get-Acquainted Tour. He reported on several upcoming Alumni events, including a networking event in Atlanta where students shadow alums at their jobs. The African-American alumni and Purple and Gold reunions are coming up soon. WCU’s oldest alum, Edna Lewis, 108 years old, recently died.

COMMENTS FROM THE STAFF SENATE CHAIR
Mr. Lavigne stated that staff morale is very low, also. There is a sense of apathy. Staff are not getting support from their leadership to serve on Staff Senate.

Mr. Lavigne reported that the UNC Staff Assembly is working on Senate Bill 575 and working with President Ross to create a “Guiding Principles” document. This is a very touchy subject for many staff, and he is currently working with Kathy Wong on ways to inform our employees of this. The Guiding Principles document is a statement that says employees will have a seat at the table and be involved in developing this new personnel system.

Mr. Lavigne explained that the Senate is currently in the middle of the nomination/election process. Mr. Lavigne stated that they are currently working on collecting items for the Staff Senate Yard Sale. Proceeds from the yard sale go to the Scholarship fund.

COMMENTS FROM THE FOUNDATION BOARD PRESIDENT
Mrs. MacNeill introduced Mr. Bradshaw and asked him to give a report from the Foundation Board. Mr. Bradshaw stated that the Foundation Board’s role is to advise and assist the University with management of the portfolio of the University. He added that they also advise and assist with fund-raising activities. He reported on the work of the Finance sub-committee and reported on the Scholarship sub-committee. With the aid of this committee, students are recruited who may not have considered applying to Western. The Catamount Club is up in financial giving.

ADJOURNMENT
There being no further business, Mr. Metcalf made a motion to adjourn the meeting. Mr. Broadwell seconded the motion, and the meeting was adjourned at 1:00 p.m.