September 1, 2011

REGULAR MEETING OF THE BOARD OF TRUSTEES OF WESTERN CAROLINA UNIVERSITY
Room 510, H.F. Robinson Building
September 1, 2011

The Board of Trustees of Western Carolina University met in regular session on September 1, 2011 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, Ms. Saunooke, Mr. Metcalf, Mr. Townsend, Mrs. Kaemmerling, Mr. Little, Mr. Forsyth, and Mr. Eaves.

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. Smith, Athletic Director; Mr. Lavigne, Staff Senate Chair; Ms. Allen, Alumni Association President; Dr. McNelis, Faculty Senate Chair; Mrs. Wargo, Assistant Vice Chancellor, Institutional Planning and Effectiveness; Ms. Ellison, Smoky Mountain News; Mr. Studenc, Senior Director of News Services; Mrs. Ashe, Administrative Assistant; Ms. Woody, Administrative Assistant; and Ms. Welch, Assistant Secretary to the Board.

Mrs. MacNeill welcomed new Board members Pat Kaemmerling, Wardell Townsend, and Carolyn Coward to their first meeting. She also welcomed Jason Lavigne, the new Staff Senate Chair.

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.

APPROVAL OF MINUTES
Mr. Forsyth moved that the minutes of the June 3, 2011 regular meeting and the minutes of the July 8, 2011 special telephone conference meeting be approved as distributed. Mr. Little seconded the motion, and it was approved unanimously.

ELECTION OF ENDOWMENT BOARD MEMBERS
Mrs. MacNeill nominated Mrs. Kaemmerling for a term on the Endowment Board ending June 30, 2014 and Mr. Forsyth for a term ending June 30, 2013. Mr. Little made a motion to approve the election of Mrs. Kaemmerling and Mr. Forsyth to the Endowment Board. Mr. Townsend seconded the motion and it was approved unanimously.

CLOSED SESSION
Mrs. Williams moved that the Board go into closed session to prevent the premature disclosure of an honorary award or scholarship; 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; to consult with our attorney to consider and give instructions concerning an existing lawsuit titled The Estate of J’Quayvin Smalls v. Smith, et. al.; and In Re: Application of the Canary Coalition, Inc. Mr. Broadwell seconded the motion, and it was approved unanimously.

Dr. Belcher asked Mr. Metcalf, Ms. Lochner and Mrs. Lynch to stay for the closed session.

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

REPORT OF THE ACADEMIC AFFAIRS AND PERSONNEL COMMITTEE
Mrs. Williams updated the Board on the pre-approval processes for salary increases for the current biennium. She stated that, for the first time ever, we have a pre-approval process involving the president of the University of North Carolina system and the Board of Governors. She added that thus far we have not had a single request denied – Executive Council has been very discerning in their review of increases brought forward. She also stated that other state agencies do not have the same flexibility to provide salary increases, just the UNC system.

Mrs. Williams explained the process for filling vacancies – the state budget language regarding positions as interpreted by the Office of State Personnel says that positions should be critical in nature before we fill them – critical is defined by direct ties to the mission of the institution, and positions that impact safety and health care. She stated that the Executive Council has come to a consensus as to what defines a critical position.

Mrs. Williams reported that, for the first time ever, some employees will be paying a portion of their health coverage. Mrs. Williams continued by saying that for those with dependent coverage, there is a 5.8% premium increase. Mrs. Williams mentioned that, effective August 1st, a new employee who elects to enroll in the retirement system will not be vested until they have contributed to the system for 10 years.

Mrs. Williams mentioned that the Interim Provost briefed the committee regarding the impact of budget cuts. She also mentioned that one of the greatest impacts of larger class sizes is on the assignments given – faculty may know what the best learning is for students, but time is a factor that faculty must consider. Mrs. Williams explained that a positive is the creation of a Task Force on Reorganization with faculty input. This is the kind of efficiency thinking we need as we move forward.

Mrs. Williams reported on retention and graduation rates. She stated that we must be much more strategic in our thinking regarding our class offerings. Mrs. Williams also stated that our freshman class is very strong; however our returning and graduate student numbers are lower. Most were impacted by the economy, personal financial difficulties and reduction in financial aid packages. She further stated that, as a result, our retention rate will possibly be lower. Mrs. Williams added that we had 9407 total enrollment last year – this year it looks like we will be between 9300-9400.

Mrs. Williams reported the following appointments: Administrative Appointments – 13; Athletic Appointments – 4; Faculty Appointments - Arts and Sciences – 13, (including term renewal of one Endowed Professor), College of Business - 1, College of Fine and Performing Arts - 2 (including term renewal of one Endowed Professor), College of Health and Human Sciences – 3; and Emeriti Status Appointments – 1.

REPORT OF THE ADMINISTRATION, GOVERNANCE AND TRUSTEESHIP COMMITTEE
Mr. Little reported on the Discussion of Interest that was held at the committee meeting. He stated that Chancellor Belcher updated the Board on budget issues and the implications for WCU. Mr. Little stated that the Chancellor also discussed his personal and institutional goals for the year. Mr. Little explained that the suggestion was made for the Chancellor to complete an Interim Report as an update between Board meetings. He agreed to do so.

Mr. Little reported that Chancellor Belcher recommended that the current Foundation Board Class of 2011 be considered as members of the Class of 2014. He reported that this is needed to help transition the Foundation Board to its new amended bylaws. Mr. Little made a motion on behalf of the committee to approve the following persons as the Foundation Board Class of 2014: James Beaty, Brad Bradshaw, Gerri Wright Garrett, Charlie Kimmel, Jim L. Moore, Keith Ramsey, and Brenda Wellmon. It was approved unanimously.

Mr. Little stated that there was an I.T. security incident where the social security numbers of 517 employees were inappropriately fed to the Office of State Budget and Management. The situation was addressed and resolved within 2 days. He further described the need for need-based financial aid for students at WCU as well as other UNC institutions.

Mr. Little stated that the current total of the WCU Endowment is $51,170,790 ($31.2 million held by the University and $19.9 million held by the Foundation). He added that 82.4 percent of Endowment funds reflect the work of the WCU Foundation, 71.0 percent ($22.5 million) of the Endowment funds held by the University support 22 endowed professorships. Mr. Little also stated that the Foundation Board of Directors on Friday approved it budget for Fiscal Year 2011-2012 of $913,021. Most of that sum will go to support scholarships and academic programs. He added that cash receipts for the Foundation and Endowment for the year ending June 30 -- $4.7 million, an increase of 82.5 percent over the prior year.

Mr. Little further stated that the Foundation fundraising for FY beginning July 1, 2012 is off to a good start with July and August totals up 92.2 percent over the prior year, with Athletic fundraising up 41.3 percent over last year. He mentioned that the average cost for a N.C. resident to attend WCU this year is $12,731 and that 72 percent of WCU students have applied for financial aid this year. Mr. Little added that $35 million less need-based financial aid is available to UNC system students this year than last year.

Mrs. MacNeill asked Mr. Eaves to report on the Student Government Association. Mr. Eaves stated that the Association of Student Governments meeting will be hosted at Western Carolina. He added that 4 members from Student Government Associations from all 17 UNC schools will come to Western Carolina University for the first time in almost 4 years. Mr. Eaves continued by saying that they plan on showing all these students from other institutions exactly what they missed out on by not choosing WCU!

Mr. Eaves stated that, in an effort to increase school spirit and tradition here, he has created something called The Power of Purple Challenge. He was at a meeting with the SGA President from Appalachian State and she was bragging about their recent success over WCU Football, insisting that ASU was better than WCU in athletics. He decided to make a friendly challenge with her… we will keep a running tally of who wins when WCU plays ASU, at the end of the school year we will see who was better during 2011-2012 in Athletics overall. Mr. Eaves mentioned that WHEN we win the end tally, the App SGA president will come to campus, dress in Western Spirit gear and take a picture with PAWS. That picture can be used by the University for promotional material and she will have to wear WCU spirit gear on her own campus for a week!

Mr. Eaves explained that there is an increased interest in SGA. He mentioned that the SGA will be more involved on campus this year than it may have ever been. Mr. Eaves also mentioned that this year SGA had a table setup at every new student orientation and Valley BallyHoo to hand out information about what SGA does on this campus. He added that the week before school began he spoke at the Annual Student Leadership Dinner about being an Extraordinary leader. He also spoke at Freshman Convocation to give freshmen tips on how to have a successful undergraduate career at WCU. Mr. Eaves continued by saying that the SGA is also being recognized in the school media with a nice article in the Western Carolinian, a commercial on TV-62 welcoming back students, and interviews on Power 90.5.

Mr. Eaves mentioned that students are very excited by the arrival of Chancellor Belcher. Every student he has talked to is excited to see what he has planned for the university; they love the energy he is bringing with his leadership style.

Mr. Eaves expressed that students are very concerned about parking this semester, as they are every semester. However, with this semester brings a new problem with the closure of Harrill residence hall. He stated that there has been a shift from residents to commuter parking, and students are having trouble finding parking places. Mr. Eaves added that between the first day of classes and Tuesday, 8/30, SGA received 184 ticket appeals. SGA will be holding a forum inviting students to express their concerns to University officials.

REPORT OF THE FINANCE AND AUDIT COMMITTEE
Mr. Broadwell reported that, in accordance with the UNC-Financial Improvement and Transformation (FIT) Project, the University is required to have a write-off policy for delinquent student accounts when all collection efforts are exhausted and the accounts are three years old. Additionally, the standards require that the Board of Trustees must approve all accounts written-off in excess of $1,000.00.

Mr. Broadwell moved on behalf of the committee to approve the proposed write-off policy, which adheres to FIT Project requirements. The motion was approved unanimously. (WRITE-OFF POLICY ON FILE WITH MINUTES MATERIALS IN TAB E-2)

Mr. Broadwell stated that, since 2004, the University has leased Verizon Wireless approximately 434 square feet of the Scott Residence Hall roof for antenna space, as well as additional interior building space for wiring. The initial lease term, negotiated at the State Property Office, was five years, with automatic extensions for three (3) additional five (5) year periods. The University currently receives $17,250.00 in annual lease payments. Verizon would like to lease an additional 120 square feet of Scott rooftop to install a new tower for 4G LTE capability. The annual payment received would increase to $30,000 during the current term, and thereafter increase 15% at the beginning of each extension period.

Mr. Broadwell moved on behalf of the committee to approve the proposed transaction to lease Cellco Partnership d/b/a Verizon Wireless an additional 120 square feet, per the aforementioned lease amounts, and authorizes the NC State Property Office to negotiate an amendment to the original agreement on the University’s behalf. The motion was approved unanimously. (VERIZON WIRELESS RESOLUTION ON FILE WITH MINUTES MATERIALS IN TAB E-3)

Mr. Broadwell explained that the Harrill Residence Hall has had no major renovations or changes since its original construction in 1971. The Legislature granted the University authorization to fund Harrill’s renovation through tax-exempt special obligation bonds. The tax-exempt bond issue will include this project along with other projects from UNC institutions – thereby referred to as the “pooled bond series”. This has become a more economical way of issuing debt for the UNC system by relieving individual campuses of issuance costs, bond attorneys, bank costs, etc. However, the University will pay a portion of these costs attributable to its piece of the bond issue. WCU will finance the renovation cost of $13,435,000.00. Mr. Broadwell moved on behalf of the committee to approve the resolution authorizing the issuance of tax-exempt special obligation bonds, as well as grant approval authorizing the Chair of the Board, the Chancellor, and the Vice Chancellor for Administration and Finance to execute all documents associated with this bond issue. The motion was approved unanimously. (RESOLUTION REGARDING ISSUANCE OF SPECIAL OBLIGATION BONDS ON FILE WITH MINUTES MATERIALS IN TAB E-4)

Mr. Broadwell stated that Mrs. Gaetano presented the committee with the proposed internal audit plan for 2011-2012. The audit plan is the result of a risk assessment performed by Mrs. Gaetano. The plan outlines the engagements the Internal Auditor will be performing in Fiscal Year 2011-2012. The standards of the Institute of Internal Audit and the Board of Governors require that the University’s Board of Trustees approve the annual plan. Mr. Broadwell moved that the audit plan for Fiscal Year 2011-2012 be approved. The motion was approved unanimously. (AUDIT PLAN ON FILE WITH MINUTES MATERIALS IN TAB E-5)

Mr. Broadwell updated the Board on the status of Capital Projects, while highlighting the continued progress related to the Health and Human Sciences Building, Central Quad, Harrill Residence Hall, campus signage and MAHEC projects. In addition, Mr. Broadwell reported on FY 11-12 Repair and Renovation project funds approved by the 2011 General Assembly. We are submitting our Repair and Renovation projects in priority order and requesting release of these funds.

Mr. Broadwell updated the Board on internal auditing. He stated that the internal auditor has issued an audit on scholarship funds accountability with findings and an audit of a pre-award grant process that could have resulted in a significant loss of funding. Additionally, she is currently completing an investigative audit in the emergency loan department.

Mr. Broadwell briefed the Board on the 2011-12 state funded budget. He mentioned details of the 16.4% cut to the University and some examples of the cut’s impact. Mr. Broadwell discussed the addition of enrollment growth money, as well as the addition of building reserve money for MAHEC and the Health and Human Sciences Building. He also informed the committee that WCU did not receive any appropriated capital funds; however, the university did receive $2,066,000.00 in repair and renovation money. Mr. Broadwell also informed the Board that 2011 legislation named Western Carolina University as the fiscal agent for the North Carolina Arboretum.

Mr. Broadwell asked Mr. Edwards to explain the Moody’s Investor Services rating report. Mr. Edwards explained that Western Carolina has a AA3 which is a rating that Moody’s gives the University. He also explained that every 12-18 months Moody’s contacts us and gathers information about the University including enrollment data, economics of the State, along with an extensive review of our financial balance sheet. Mr. Edwards continued by saying that, as a result of this review, we obtain the rating that we currently have or they change that rating. He added that for a number of years we have been a AA3 rating with a stable outlook. Mr. Edwards mentioned that we have maintained our rating, even though we know additional budget cuts could jeopardize this rating. He explained Moody’s review moved WCU from a AA3 stable outlook to a AA3 negative outlook which has created a lot of media attention. The Chancellor commented that the debt will pay for itself but when Moody’s comes in they look at the overall balance sheet. Mr. Edwards stated that he contacted Moody’s regarding the issuance of the new debt approved today. This will not affect our rating or outlook.

COMMENTS BY CHAIR MACNEILL
Mrs. MacNeill stated that she appreciates the commitment of everyone on the Board for being here today. She thanked Anne Aldrich, Dawne Coward, and Donna Welch for making the Trustees’ job easy. She further thanked the Chancellor’s Office staff: Ernie Plemmons, Christy Ashe, Karen Woody, Jessica Humphrey, and especially Terry Welch. Mrs. MacNeill mentioned that the new Board orientation book is very helpful. She added that the Trustee Orientation day was wonderful. Mrs. MacNeill mentioned that, at a previous Board retreat, the Trustees wanted to come up with expectations of board members. She stated that the next Board retreat will be November 4th. Mrs. MacNeill mentioned that we are entering a new era and want to enhance the partnership with the new Chancellor. She added that, before the renovation to the Chancellor’s residence had begun, there were safety and deferred maintenance issues. Mrs. MacNeill added that the Board decided to make the residence better for whoever the Chancellor would be. She explained that the budget constraints were challenging. Mrs. MacNeill also added that the residence renovation was a Board initiative; therefore she and others tried to raise funds to fix the public areas. She stated that there has been 100% participation of the Board on this project and that $90,000 has been committed. She believes they will raise the full amount of $125,000 for this project.

COMMENTS FROM CHANCELLOR BELCHER
Dr. Belcher stated that he has asked Melissa Wargo and Sam Miller to brief the Board on a few issues. Dr. Wargo updated the Board on the upcoming process of strategic planning. She explained the process and the 2020 Commission membership. Dr. Wargo mentioned that the first meeting is scheduled for next week. The Chancellor stated that the Board will spend part of the retreat talking about strategic planning. The Board will be apprised at every meeting about the thinking behind strategic planning.

Dr. Wargo also explained the peer selection process and the proposed list of peers. She stated that this process was initiated by General Administration and that we were able to develop our own criteria and our own process. Dr. Wargo added that GA has asked that we reduce our list to 18 and identify aspirant institutions in this group. Discussion of the peer group and how it affects us followed.

Dr. Sam Miller explained the enrollment profile for new freshmen and transfers and talked about where enrollment is right now and how that relates to our budget. He asked the question “how do we hold on to quality while increasing our freshman retention rate?” Dr. Miller stated that the SAT is not the best indicator of performance and that they will be looking at other factors. Dr. Miller also stated that they will recruit students who want to be here and have the characteristics to be successful. Discussion of these issues followed. Dr. Miller mentioned that we need to do a comprehensive look at how we are doing at enrollment. The Chancellor stated that he would like to have a meeting with all community college presidents and superintendents to talk about seamless education for western North Carolina. He added that we need to stop talking and start solving. Dr. Belcher explained the Great Grades approach since high school GPA is a better indicator of success. We are shifting our focus to high school GPA.

Mrs. MacNeill asked everyone to fill out the meeting evaluation form and update their information sheet.

COMMENTS FROM THE ALUMNI ASSOCIATION PRESIDENT
Ms. Allen stated that she appreciates being able to be a part of the Trustee meetings. She reported that this summer’s alumni reunion had the largest attendance ever. Ms. Allen also reported that they had the oldest living alumnus at the reunion. Her name is Edna Lewis; she is 108 years old and lives in Sylva. She explained that Gary Carden did a one-man play about the life of Robert Lee Madison. Ms. Allen said it was wonderful to have the opportunity to go back to the past and learn how this University was started. She reminded everyone about the alumni awards ceremony at Homecoming and mentioned the recipients: Bobbi Baker James, receiving the Young Alumna Award; Dale Sims will receive the Professional Achievement Award; Cecil Adderley will receive the Academic Achievement Award; and Myron Coulter will receive the Distinguished Service Award. Ms. Allen mentioned that the alumni are actively involved in the Chancellor’s Get Acquainted Tour.

COMMENTS FROM THE STAFF SENATE CHAIR
Mr. Lavigne introduced himself to the Board. He stated that the Senate has held its first “Meet the Staff Senate” event. Mr. Lavigne also stated that they have worked with the chair of the Strategic Planning Committee to provide names of staff who would be willing to serve on the committee. He added that they have also appointed staff to serve on the Reorganization Task force.

Mr. Lavigne mentioned that they are working on developing a newsletter that they will send out to staff to update them on the activities of the Staff Senate. He also mentioned that they are working on creating a list of the local businesses that provide discounts and other benefits to WCU Community members. Mr. Lavigne further mentioned that they have talked with Legal Counsel on the possibility of making this list public via our website. Legal Counsel has stated that as long as the business is OK with it, we can proceed.

Mr. Lavigne also added that they will be presenting a plan to the Chancellor’s Leadership Council to create the “Catamount Memorial Garden” which is an inclusive memorial in honor of all members of the Catamount Community, incorporating existing Student Memorial Trees. Mr. Lavigne reported that they have talked with Facilities and have an estimate of approximately $5000 to get the garden started. He also reported that they have talked with the head of Facilities to see if the proposed location is part of the Campus Master Plan.

COMMENTS FROM THE FACULTY SENATE CHAIR
Dr. McNelis stated that the Faculty Senate was surprised and delighted that the Board members attended the Senate yesterday. She added that there was a large turnout at the Faculty Caucus. Dr. McNelis mentioned that it is the participation of the university employees that matters and the mindset will change. We need to look at our engagement and service to the community in participating in the Global Poverty Project. She also mentioned that we need to focus on the positive and not the negative.

Dr. McNelis reported that last week she was asked to consider writing a piece for the Faculty Forum regarding the faculty perspective on hopes for the future with a new chancellor, but she believes we need to broaden our view beyond that of the changes the chancellor can instigate, but to the changes we can bring to fruition as a community. Dr. McNelis also stated that she believes Western Carolina University is starting to see a change in momentum and we are exploring more ways of joining together in the spirit of cooperation and shared ownership to work to a common vision. She added that, by the end of next week, a joint task force uniting faculty, staff, and administration in Academic Affairs will begin work on crafting a policy to guide any reorganization processes within the division that will assure the integrity of WCU’s academic mission and provide for meaningful faculty, staff, and student voice.

Dr. McNelis continued by saying that, although the Faculty Senate does not meet over the summer, their agendas for the upcoming year are already filling up. She explained that they had a strong showing of faculty at the fall caucus on August 15. Dr. McNelis stated that, not surprisingly, faculty issues centered on managing the impact of reduced budgets and transparency in university processes and decisions.

Mrs. MacNeill thanked Chancellor Belcher for energizing the campus.

ADJOURNMENT
There being no further business, Mr. Broadwell made a motion to adjourn the meeting. Mr. Metcalf seconded the motion, and it was approved unanimously. The meeting was adjourned at 12:32 p.m.