Docstoc

South Carolina

Document Sample
South Carolina Powered By Docstoc
					                                                                         Agenda Item II
                                         DRAFT




                     South Carolina Centers of Economic Excellence
                           Minutes of the Review Board Meeting
                                     August 20, 2007
Welcome and Introductions

Chairman Harper-Bethea greeted those present and called the meeting of the South
Carolina Centers of Economic Excellence Review Board to order at 10:01 a.m. The
meeting was held in the ABC Conference Room of the Nelson Mullins Law Firm in the
Meridian Building in Columbia, SC. Review Board members present included:

Paula Harper-Bethea, Chair                       Patricia Wilson
Donald Babb, Vice-Chair                          Keith Munson
Bobby Pearce                                     Raymond S. Greenberg
Melvin C. Williams                               Andrew A. Sorensen
J. Lyles Glenn                                   James F. Barker

Review Board members not in attendance:

Ed McMullen                                      Gregg Morton

Others in attendance included:

Warren Counts, Derrick, Stubbs & Stith           Bart Yancey, MUSC
Trisha Ostrowski, Clare Morris Agency            Sandy McGill, MUSC
Clare Morris, Clare Morris Agency                Mark Sweatman, MUSC
Jessica Daly, Clare Morris Agency                Chris Przirembel, Clemson
Karen Owens, Clare Morris Agency                 Angie Leidinger, Clemson
Gordon Baylis, Health Sciences SC                Kathy Coleman, Clemson
LaVerne Shuler, Health Sciences SC               Sandy Woodward, Clemson
Harris Pastides, USC                             Garrison Walters, CHE
Casey Martin, USC                                Gail Morrison, CHE
Rose Booze, USC                                  Gary Glenn, CHE
Wanda Hutto, USC                                 Argentini Anderson, CHE
Shirley Mells, USC                               Laura Belcher, CHE
John Raymond, MUSC                               Arik Bjorn, CHE


S.C. Centers of Economic Excellence                      Review Board Minutes June 18, 2007

                                         Ausgu
Chair Harper-Bethea thanked President Greenberg for MUSC’s hospitality in hosting the
previous June 18, 2007, CoEE Review Board meeting. She noted that President Sorensen
would be arriving shortly; in his stead Dr. Pastides would be representing USC. She
asked those in attendance to introduce themselves briefly.

Presentation of Resolution Recognizing the Service of Former CoEE Acting
Chairman Samuel J. Tenenbaum

Chair Harper-Bethea presented former CoEE Review Board Acting Chairman Samuel J.
Tenenbaum with a formal resolution from the Review Board for his extraordinary work,
vision, and foresight in helping to create, then serve the mission, of the Centers of
Economic Excellence Program. She said Mr. Tenenbaum was an individual who
challenged the Review Board and all CoEE stakeholders to dream big and expect better.
She read the resolution aloud:

        WHEREAS, Mr. Samuel J. Tenenbaum, served nearly five years as a
        distinguished member of the South Carolina Centers of Economic
        Excellence Review Board (Board);

        WHEREAS, Mr. Tenenbaum fulfilled the charge of The South Carolina
        Research Centers of Economic Excellence Act (Act) to fund endowments for
        professorships in targeted research areas that will create well-paying jobs
        and enhanced economic opportunities for the people of South Carolina;

        WHEREAS, Mr. Tenenbaum fulfilled the charge of The Act to provide
        oversight of the Centers of Economic Excellence Matching Endowment;

        WHEREAS, Mr. Tenenbaum served as an indefatigable advocate of the
        Endowed Chairs Program (Program), soliciting the full support of the South
        Carolina legislature, and extolling the virtues and successes of the Program
        to the media and to all concerned members of the public and private
        sectors;

        WHEREAS, Mr. Tenenbaum did excellently serve the Board as Vice-
        Chairman and Acting Chairman;

        NOW THEREFORE,

        BE IT RESOLVED: The South Carolina Centers of Economic Excellence
        Review Board commends Samuel J. Tenenbaum for his extraordinary
        service and leadership to this Board and to the economic well-being of the
        State of South Carolina; and

        BE IT FURTHER RESOLVED; The South Carolina Centers of Economic
        Excellence Review Board hereby acknowledges the dedication
        demonstrated by Mr. Tenenbaum and thanks him warmly for his
        outstanding efforts.

S.C. Centers of Economic Excellence                  Review Board Minutes August 20, 2007

                                          2
Mr. Tenenbaum addressed the Review Board and stated that the Endowed Chairs
Program was one of South Carolina’s most important initiatives. He cited how economic
development investment by the government of Ireland had turned that nation into one of
the most thriving European economies. Mr. Tenenbaum noted that the size of Ireland and
South Carolina were virtually the same, and he added that Ireland now serves as a
technology magnet, attracting the best and brightest minds of Europe.

Mr. Tenenbaum commented briefly about the success of the Georgia Research Alliance.
The state of George has invested $400 million in its Eminent Scholars Program. Thus
far, the result is the hiring of 50 eminent scholars, the creation of 5,000 technology jobs,
and the in-state establishment of 100 technology companies. He also discussed
Kentucky’s Bucks for Brains program, noting that the University of Louisville has
increased its endowed chairs from 25 to 60. He added that Israel has the second largest
number of tech startup companies in the world, the result of major governmental research
and development investment. Intel is currently building a $4 billion facility there, and
major businessmen like Warren Buffet have begun investing in the country’s economy.

Mr. Tenenbaum stated that the Endowed Chairs Program is unique when compared to
other similar state programs, as South Carolina is investing the state’s lottery funds and
using matching money as an incentive to spur economic growth. He added that when the
Endowed Chairs program began, the Review Board used the authority granted by the
General Assembly in a wise, flexible manner to create a fine operation.

Mr. Tenenbaum encouraged Presidents Barker and Sorensen to promote the CoEE
Program during halftime of the Clemson-USC football game this year. He also shared
his desire to see a CoEE Program write-up in the New York Times. He added that the
Times had recently written about the Bucks for Brains Program.

He exhorted the Review Board to remember that major economic development takes
time, and he cautioned against yielding to the instantaneous expectations of the
“microwave society.” Finally, he encouraged the Board to seek program renewal.

Opening Remarks

Chair Harper-Bethea welcomed Dr. Walters, the newly appointed Executive Director of
the South Carolina Commission on Higher Education. She thanked Dr. Walters for his
previous work as chair of the CoEE Onsite Review Panel.

Dr. Walters addressed the Review Board briefly and shared that in his first six weeks in
the state, he was impressed by the quality of leadership in the South Carolina higher
education system and by the technical college system and the focus on graduate
education at the state’s comprehensive teaching institutions. He seconded Mr.
Tenenbaum’s comments regarding Ireland and noted that Ireland’s recent economic
boom is directly related to the fact that it is one of the most educated countries in the
world.


S.C. Centers of Economic Excellence                      Review Board Minutes August 20, 2007

                                             3
Dr. Walters expressed his opinion that South Carolina needs to improve secondary
education and that the higher education system needs to develop a well-conceived
statewide action plan. He noted that the states with the most successful higher education
systems—states like North Carolina—are ones which have developed comprehensive
actions plans.

Chair Harper-Bethea thanked Dr. Walters for his remarks and stated that the Review
Board looked forward to working with him as he leads the state forward.

Consideration of Minutes

The minutes of the June 18, 2007, Review Board meetings were discussed briefly.

   Action on the June 18, 2007, Minutes

 Mr. Pearce moved and Mr. Williams seconded a motion to approve the June 18,
  2007, minutes as drafted. The motion was approved with all members of the
  Review Board present voting in favor of the motion.

Presentation and Discussion of the CoEE Website

Chair Harper-Bethea introduced members of the Clare Morris Agency to present the
program website. Chair Harper-Bethea reminded the Review Board that the goal was to
launch the program website on September 4, 2007. She added that the website is a
critical communication tool for the program, and it was important for members of the
Review Board to provide feedback via email following the presentation and meeting.

Ms. Morris briefly updated the Review Board on program marketing activities. She
shared that her agency had been able to place one op-ed piece on behalf of the university
presidents and added that she hoped to place two more op-ed pieces soon, including one
by Bobby Hitt of BMW concerning BMW’s partnership with CU-ICAR. Ms. Morris
reminded members of the Review Board that there would be a program legislative
breakfast, co-hosted with New Carolina, on January 31, 2008.

Ms. Morris introduced Ms. Daly, who delivered an online presentation on the program
website and its four major sections: ABOUT THE PROGRAM, INVEST IN COEE, CENTERS &
CHAIRS, and PROGRAM SUCCESSES. She shared that the website could be viewed online
at www.sccoee.org/default1.asp, but it was not yet available to the general public; i.e., it
could not be accessed through search engines until the “default1.asp” phrase was
removed from the URL. On the CURRENT CENTERS page, she noted that the goal was to
provide a one-page summary of each CoEE; at present, such a summary page only exists
for the Brain Imaging CoEE. She added that CMA intended to meet with the CoEE
directors, research vice presidents, and current endowed chair-holders in order to “beef
up” information on the Website.


S.C. Centers of Economic Excellence                      Review Board Minutes August 20, 2007

                                             4
Mr. Pearce asked whether the CMA staff had studied the economic development
presentations on the websites for the Georgia Research Alliance Eminent Scholars
Program and the Kentucky Bucks for Brains Program. [These websites are, respectively,
http://www.gra.org/eminentscholars.asp and http://www.research.uky.edu/ca/rctf/ .] Ms.
Daly replied that the CMA staff had examined these websites and found that they
“measure economic development differently.”

Ms. Daly shared that the website was an excellent forum for exhibiting program press
releases, news clips, and streaming video files, such as the CoEE commercials that
featured the university presidents and endowed chair-holder Dr. Richard Swaja’s
appearance on This Week in the House.

Ms. Daly concluded by stating that the overall goal was to make the website user-
friendly. She requested feedback and suggestions from members of the Review Board by
August 31, 2007, in order to make changes by the September 4, 2007, launch date. Chair
Harper-Bethea seconded this request, thanked the Clare Morris Agency for its work, and
stated that the website appeared user-friendly and fluid.

President Barker suggested that a section of the website be dedicated to highlighting the
facilities being built per the Research University Infrastructure Act. Chair Harper-Bethea
asked the universities to submit photographs of these projects for inclusion on the
website.

Dr. Pastides added that he thought there were services provided to help promote websites
nationally and internationally for a fee. Mr. Bjorn replied that CHE staff had created
metadata lists for the website which helped increase the website’s search engine ranking
status. He encouraged the institutions to submit additional keywords or phrases to be
added to the already existing metadata lists.

   No action taken

Presentation and Discussion of CoEE Program Audit Draft

Chair Harper-Bethea introduced Mr. Counts of Derrick, Stubbs & Stith, LLP, to present
the external audit draft. She noted that this first program audit was very complex as it
covered the first four years of the program. She complimented Mr. Counts and his firm
on a phenomenal undertaking, and she was eager to report that the CoEE Program was
receiving an unqualified audit with no major material findings. She commended the
effort and ethics of all program stakeholders.

Mr. Counts reviewed each fiscal year report, beginning with 2002-2003 and proceeding
to 2003-2004, 2004-2005, and 2005-2006. He confirmed the unqualified audit results for
all four fiscal years. He noted that each report contains the same management discussion
and analysis report prepared by CHE staff, as well as the independent auditor’s report


S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                            5
prepared by Derrick, Stubbs & Stith. Following these reports are consolidated summaries
of the financial activity at each research institution for the respective fiscal year. These
are proceeded by financial statement notes, which include a program description, a
summary of significant accounting program policies, a schedule of assets maintained by
the research institutions, changes in program policies, and the independent auditor’s
Report on Compliance and on Internal Control over Financial Reporting Based on an
Audit of Financial Statements Performed in Accordance with Government Auditing
Standards. Finally, each fiscal year report concludes with a schedule of findings and
questioned costs. Mr. Counts reviewed the findings and the corrective actions taken by
the Review Board, CHE staff, and the three research institutions for each report.

Chair Harper-Bethea pointed out that a sample drawdown checklist was included at the
end of each fiscal year report. She shared that during the previous year this checklist had
been created by CHE staff in order to ensure compliance certainty prior to the releasing
of state funds for any CoEE. She assured members of the Review Board that the
checklist would go a long way to eliminating most findings for the subsequent 2006-2007
audit. Mr. Counts agreed that the drawdown checklist was an excellent tool, and he
commended CHE staff for its implementation.

Mr. Counts encouraged the Review Board to develop an annual report template for the
annual institutional reports. Dr. Morrison reported that such a template was currently
being designed by CHE staff for the upcoming October 2007 reports.

Mr. Counts recommended that the Program Guidelines be revised to ensure that pledges
could not be substituted as a strategy for altering pledge verification deadlines. [To date
this has not occurred.] Dr. Morrison noted that such a revision was an agenda item at the
current meeting. Mr. Counts also recommended that the Program Guidelines be revised
to include a policy on the termination of a Center of Economic Excellence—especially as
regards returning state funds which have been drawn down for a defunct CoEE. [To date
no CoEE has been terminated which has drawn state funds.]

Chair Harper-Bethea asked Mr. Counts whether he had received full cooperation from the
Review Board, CHE staff, and the research institutions. Mr. Counts replied that he had
received full cooperation from all program stakeholders.

Mr. Glenn asked whether the audit also examined whether funds had been used in
accordance with the purposes of the program and institutional internal policies. He also
inquired whether Mr. Counts had relied upon the representation of the institutions for
such examinations. Mr. Counts replied that sample expenditures had been collected and
examined to see whether they were appropriate and compliant. No findings resulted from
these examinations. He added that the institutional representation letters had not yet been
collected but would be in the final report.

Chair Harper-Bethea asked whether Mr. Counts had further recommendations regarding
the Program Guidelines. Mr. Counts answered he had no additional recommendations.


S.C. Centers of Economic Excellence                      Review Board Minutes August 20, 2007

                                             6
Mr. Munson inquired about Mr. Count’s position on the statutory requirement that non-
state matching funds be placed into endowment, as presently the Review Board’s policy
allowed a percentage of the non-state funds to be used for startup costs. Mr. Counts
replied that he did not recall that the statute mandated all non-state funds required
placement into endowment.

Chair Harper-Bethea thanked Mr. Counts for his efforts and presentation. She was
certain that the General Assembly would be pleased with the results of the audit. Mr.
Counts informed Chair Harper-Bethea that the final report would be ready as soon as he
received the representation letters from CHE staff and the research institutions.

   No action taken

Chair Harper-Bethea welcomed President Sorensen, who had arrived during Mr. Count’s
presentation.

Consideration of Revised Proposal for CoEE in Older Adult Independence

Chair Harper-Bethea asked Dr. Pastides to present the revised proposal for the CoEE in
Older Adult Independence, a collaboration between USC and Clemson University. Dr.
Pastides noted that the proposal name had been changed to the SeniorSMART™ Center.
He reminded the Review Board that the initial proposal had received a favorable review
by the Onsite Review Panel, but the panel had expressed concern about the lack of
graduate programs in the proposal. The revised proposal had received a positive
recommendation from the Onsite Review Panel. Dr. Pastides shared that this CoEE
intended to improved technology in homes so that senior citizens could stay at home
longer without moving to assisted living facilities. There was also a proposal component
for research at CU-ICAR to facilitate advanced technology and signaling devices to allow
seniors to continue driving into their later years. Dr. Pastides added that Health Sciences
South Carolina was prepared to make a significant major pledge to the CoEE.

Dr. Walters commented favorably on the revised proposal, especially concerning the
inclusion of graduate programs. He noted that the proposed CoEE was an exemplar of
institutional collaboration. Chair-Harper Bethea stated that the Onsite Review Panel had
recommended the full $5 million in funding for the proposal.

Mr. Glenn asked Dr. Pastides where the research center would be housed. Dr. Pastides
replied in the school of medicine and the engineering buildings. Dr. Przirembel added
that there would be additional research at the Department of Psychology at Clemson, as
well as at the Greenville Hospital System and CU-ICAR.

Mrs. Wilson asked whether there were similar research centers like this in the nation. Dr.
Pastides stated that private sector partners had indicated this would be a unique research
center which would provide South Carolina an opportunity to gain a major reputation in


S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                            7
the industry. He added that while there was competition in the field, this was an
opportunity for the institutions to have a major industry leadership role. Mrs. Wilson
inquired whether a major impact could be made with the limited funds being invested.
Dr. Pastides replied that the combination of the core faculty competence, plus the support
of HSSC, was indeed likely to make a major impact.

Chair Harper-Bethea shared her belief that this was an important proposal, especially as
South Carolina attracts a large number of retirees. She called for a motion on the item.
Mr. Munson asked whether any of the non-state matching funds would be used for non-
endowment purposes. Dr. Pastides replied that a portion of the non-state funding would
be used for research center startup costs, as permitted by the Revised Program
Guidelines.

   Action on Revised Proposal for the SeniorSMART™ Center of Economic Excellence,
    a collaborative CoEE between USC and Clemson University

 Mrs. Wilson moved and Mr. Babb seconded a motion to award the full $5
  million in funding for the revised proposal for the SeniorSMART™ Center of
  Economic Excellence. The motion was approved with all members of the Review
  Board present voting in favor of the motion, with the exception of Mr. Munson,
  who abstained.

Consideration of Policy and Procedure Guidelines for Research University
Infrastructure Act Projects

Dr. Morrison reviewed the proposed draft for Program Guidelines for the South Carolina
Research University Infrastructure Act. In addition to laying out the Review Board’s
statutory responsibilities for Research University Infrastructure Act (RUIA) projects, the
Guidelines function to inform the Review Board of the additional processes the
institutions must undertake to receive approval for each project. The Guidelines also
capture certification procedures that have developed over time, including the Cost Share
Accounting Policy, which the Review Board approved at the February 2007 meeting.
Additionally, certain certified RUIA projects now require recertification due to major
project changes; the Guidelines create specific procedures for recertifying RUIA projects.

Chair Harper-Bethea asked the members of the Review Board whether they had had the
opportunity to review the proposed RUIA Guidelines. No members of the Review Board
indicated they had not had such an opportunity.

Mr. Pearce asked how much of the original bond funds remained to be certified. Dr.
Morrison replied that between one-half and one-third of the $220 million remained to be
certified. She reminded the Review Board that its primary responsibility is to certify the
project definition and the proposed non-state matching funds for each RUIA project.
While the research institutions have presented projects to the Review Board for all $220
million, not all of the projects were ready to be certified.


S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                            8
Mr. Munson said a footnote should be added to Section IV(a), indicating that a more
detailed discussion of eligible non-state matching funds followed in Section VIII.

Dr. Raymond had a question regarding Section VI, “Recertification Process for Changes
to RUIA Projects.” Construction costs have increased so much that he was concerned
about the ability of the institutions to obtain the 50% non-state match requirement for all
projects. He thought that the statute only required dollar-for-dollar non-state matching of
the state bonds. Dr. Raymond and Dr. Pastides wondered if the language couldn’t be
changed from “50% of the total project cost” to instead refer to a “dollar-for-dollar”
matching requirement.

Mr. Bjorn pointed out that Section 70 of the Research University Infrastructure Act did
not appear to permit such flexibility. Mr. Gary Glenn stated that it was important to
define a project such that an institution could viably obtain matching funds equal to the
total amount of bond funding being sought. Dr. Morrison concurred.

President Greenberg and President Sorensen suggested adding “at least” to the final
sentence of the first paragraph, such that it would read “…must demonstrate that at least
50% of the total project cost is matched….” Thus, the institutions would have permission
to raise more than 50% of the cost of the project from non-state sources. Mr. Pearce saw
no reason why the institutions should not be able to overmatch each project. Mr. Gary
Glenn added that the “at least” language already existed in Section IV(a).

   Action on Policy and Procedure Guidelines for Research University Infrastructure
    Act Projects

 Mr. Pearce moved and Mr. Williams seconded a motion to adopt the Program
  Guidelines for the South Carolina Research University Infrastructure Act, as
  drafted, with the additional amendments suggested by Mr. Munson [see above]
  and Presidents Greenberg and Sorensen [see above]. The motion was approved
  with all members of the Review Board present voting in favor of the motion.

Consideration of Revisions to CoEE Program Guidelines

Chair Harper-Bethea led a discussion about proposed revisions to the CoEE Revised
Program Guidelines.

The first issue for consideration was the requirement of institutions to inform the Review
Board of exchanging non-state matches and also to resubmit any previous matching funds
forms upon an exchanged match. This revision resulted from a recommendation from
Mr. Counts.

   Action on Proposed Guideline Revision I



S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                            9
 Mr. Glenn moved and Mr. Williams seconded a motion to include the revision
  titled Notification of Exchanging Non-State Matches as drafted, to the CoEE
  Revised Program Guidelines. The motion was approved with all members of the
  Review Board present voting in favor of the motion.

The second issue for consideration was the implementation of a retroactive effective date
for all revisions to the CoEE Revised Program Guidelines. Mr. Munson commented that
this would be easily manageable only if the Guidelines were revised in a loosening
manner rather than a tightening manner. He wondered how it would be possible to
administrate retroactive “tightening.” Mr. Glenn proposed that the phrase “unless
otherwise specified” be added to the first sentence of the proposed new Section XIII(g).

   Action on Proposed Guideline Revision II

 Mr. Williams moved and Mr. Pearce seconded a motion to include the revision
  titled Implementation Dates of Revisions to Program Guidelines, as drafted, with
  the additional amendment proposed by Mr. Glenn [see above], to the CoEE
  Revised Program Guidelines. The motion was approved with all members of the
  Review Board present voting in favor of the motion, with the exception of Mr.
  Munson, who abstained.

The third issue for consideration was the prohibition of double-matching for the CoEE
Program. Brief discussion ensued.

   Action on Proposed Guideline Revision III

 Mr. Pearce moved and Mr. Munson seconded a motion to include the revision
  titled Prohibition Against Double-Matching, as drafted, to the CoEE Revised
  Program Guidelines. The motion was approved with all members of the Review
  Board present voting in favor of the motion.

The fourth issue for consideration was an arms-length non-state matching donation policy
for institutional 501(c)(3) component units. Dr. Morrison shared that on July 26, 2007,
CHE staff hosted a forum attended by representatives from all three institutions to discuss
the eligibility of institutional component units to contribute non-state matching funds to
the CoEE Program or RUIA projects. Mr. Rick Harmon of the Treasurer’s Office
participated in the forum and had presented the opinion that such entities were not legally
prevented from making non-state match contributions so long as state funds had not been
financially “captured” within the entity’s donation.

Chair Harper-Bethea noted that this was a discussion that had gone on for months and it
appeared a satisfactory answer had finally been obtained.

   Action on Proposed Guideline Revision IV



S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                            10
 Mr. Glenn moved and Mr. Munson seconded a motion to include the revision
  titled Arms-Length Donation Policy, as drafted, to the CoEE Revised Program
  Guidelines. The motion was approved with all members of the Review Board
  present voting in favor of the motion.

President Greenberg asked if by extension this Arms-Length Donation Policy would
apply to RUIA projects. Mr. Bjorn replied that a section of the draft enabled the policy
language to be adopted into the RUIA Guidelines as well.

Mr. Glenn proposed that the phrase “institutional revenue” be added to the prohibitive list
of non-qualifying component unit funds: “state appropriations, tuition, or fees.”

   Amendment to Proposed Guideline Revision IV

 Mr. Glenn moved and Mr. Munson seconded a motion to amend Revision IV
  above to include the phrase “institutional revenue” in the prohibitive list of non-
  qualifying component unit funds: “state appropriations, tuition, or fees.” The
  motion was approved with all members of the Review Board present voting in
  favor of the motion.

The fifth issue for consideration was the interpretation of the “federal dollars received”
clause in Section 90 of the S.C. Research Centers of Economic Excellence Act. The
proposed definition takes into consideration that a federal grant might be awarded on a
certain date, but an institution might not come into receipt of federal funds for a
considerable amount of time as the grant funds may be awarded via reimbursement.

Mr. Pearce asked how many institutions were affected by a difference in the award date
of a federal grant and the reimbursement of funds. Dr. Raymond replied that it was
particularly relevant to funding CoEEs connected to the Hollings Cancer Center. The
difference between the award date and the date of expenditure could be a difference of
several years following the award date.

   Amendment to Proposed Guideline Revision V

 Mr. Williams moved and Mr. Babb seconded a motion to include the revision
  titled Definition of “Federal Dollars Received” Clause in South Carolina
  Research Centers of Economic Excellence Act, as drafted, to the CoEE Revised
  Program Guidelines. The motion was approved with all members of the Review
  Board present voting in favor of the motion.

Consideration of Changes to Review Board Bylaws

Dr. Morrison shared that the Bylaws of the Review Board do not specify operational
standards. The Review Board has always used Robert’s Rules of Order, and CHE staff
recommended adding Robert’s Rules to the Review Board Bylaws.

S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                            11
   Action on Amendment to Bylaws of the CoEE Review Board

 Mr. Munson moved and Mr. Babb seconded a motion to amend Article III of the
  CoEE Review Board Bylaws to incorporate Robert’s Rules of Orders as the
  operational standard for Review Board meetings, as drafted in the document
  titled Meetings Governed by Robert’s Rules of Order. The motion was approved
  with all members of the Review Board present voting in favor of the motion.

Dr. Morrison asked if the CoEE fellows programmatic support proposal could be moved
on the agenda to follow the presidents’ discussion of improving program operations.
Chair Harper-Bethea agreed to consider both items after the lunch break.

Consideration of Second Six-Month Pledge Verification Deadline Extension for
Electron Imaging

Dr. Morrison presented the June 28, 2007, letter from President Barker requesting a
second six-month pledge verification deadline extension for the Electron Imaging CoEE.
[The first six-month pledge verification deadline was granted at the February 26, 2007,
Review Board meeting, and lasted from December 29, 2006, to June 28, 2007.] Dr.
Przirembel shared that Clemson was close to securing the full non-state match from a
major international company, and he anticipated negotiations would be completed
successfully by the end of the 2007 calendar year.

   Action on Second Six-Month Pledge Verification Deadline Extension for the Electron
    Imaging CoEE (Clemson)

 Mr. Pearce moved and Mr. Babb seconded a motion to grant a second six-month
  pledge verification deadline extension for Clemson University’s Electron
  Imaging CoEE, which would extend from June 29, 2007, to December 28, 2007.
  The motion was approved with all members of the Review Board present voting
  in favor of the motion.

Chair Harper-Bethea recessed the Review Board for lunch at 12:13 p.m.

The meeting reconvened at 12:25 p.m. with all members of the Review Board present.

Discussion of Improving Program Operation (Based on Suggestions from Section III
of the 2006-2007 Onsite Review Panel Final Report)

Chair Harper-Bethea asked Dr. Raymond to share first regarding the institutional
response to recommendations for program improvement from the 2006-2007 Onsite
Review Panel Final Report.




S.C. Centers of Economic Excellence                   Review Board Minutes August 20, 2007

                                          12
Dr. Raymond said that he would attempt to order his remarks according to the August 13,
2007, draft letter from the three institutional presidents.

One of the review panel’s suggestions was to enhance proposals using the basic sciences.
While the institutions agree that the basic sciences provide key underpinnings for each
proposal, because of the program’s economic development emphases, the institutions
would most likely continue favoring a translational focus. However, if the program were
to be renewed with a different emphasis, the institutions would consider submitting basic
science proposals.

As for how the institutions are dealing with joint intellectual property, Dr. Raymond
assured the Review Board that each institution has memoranda of agreements and joint
intellectual property agreements. At present, the institutions feel that management of
individual conflict of interest is a more pressing issue. Each of the three research
institutions has policies in place with oversight provided by internal review committees.
Dr. Raymond reminded the Review Board that such conflicts are natural; managing them
properly is what matters most. The institutions would prefer to manage these matters
through the already existing university structure.

Chair Harper-Bethea asked about development of conflict of interest policies at each of
the research institutions. Dr. Raymond replied that MUSC’s conflict of interest policy is
in a nascent stage; it is implemented but needs refinement. He added that the conflict of
interest policy for individuals is very well-refined. Dr. Przirembel commented that at
Clemson the conflict of interest policy for individuals is spelled out quite clearly whereas
the conflict of commitment policy is still in an early stage. Dr. Pastides replied that USC
has enforceable conflict of interest and conflict of commitment policies and is in the
process of revising its technology transfer policy. USC faculty generally feels free to
disclose work with a private entity. He noted that unfortunately at many public
universities, such private-public work is still frowned upon. He concluded that USC was
moving to a fuller disclosure system and was also creating more rewards in the promotion
and tenure system.

Chair Harper-Bethea exhorted the institutions to be careful in all manners of conflict of
interest and to consider carefully public reaction even in cases where a disclosed conflict
might be legal but still subject to public scrutiny. She suggested it was best to err on the
side of revealing more information and acting in an offensive, rather than defensive,
manner.

President Greenberg shared that MUSC had already experienced a circumstance where a
competitor company has accused an endowed chair-holder of having an unethical
relationship with a competitor. However, the relationship in question had been fully
disclosed and had passed all appropriate processes. He stated that relationships between
the CoEEs and the private sector were necessary in order to foster economic
development. He pointed out that none of BMW’s competitive automakers complained



S.C. Centers of Economic Excellence                      Review Board Minutes August 20, 2007

                                            13
when BMW partnered with Clemson at ICAR. Sometimes, however, even with full
disclosure, certain people will cry foul about inappropriate relationships.

Returning to the presidents’ letter, Dr. Raymond stated that the three research institutions
were revising their procedures and policies in response to the call for openness and
collaboration. He also stated that the institutions would be submitting a statewide
strategic plan prior to the next Onsite Review Panel in April 2008.

Dr. Raymond continued on to the panel’s infrastructure recommendations, such as
broadband networking and computational sciences. He stated that significant steps had
been taken in the previous year with respect to S.C. LightRail. The institutions also
hoped to develop wireless remote access beyond the hubs. They envisioned being able to
share the networking system with hospitals, physician practices, technical colleges, and
the four-year institutions.

Chair Harper-Bethea asked for an update on the LightRail.

President Barker replied that each of the research institutions had been allocated $1.5
million in 2007-2008 for LightRail development. He added that because of Clemson’s
geographic proximity to the national LambdaRail, it had already connected to the system.

Dr. Raymond added that even though the institutions had not yet formally notified the
Review Board, an endowed chair from Duke had been hired [though not formally
announced] for the Healthcare Quality CoEE to work on interoperability and complex
systems, high capacity data sharing and networking and storage.

The institutions intended to work more closely on graduate education: Currently there is
an effort to create a joint masters degree program in clinical research.

Dr. Raymond stated that the institutions were asking the Review Board for help in
acquiring non-matched funding to implement the CoEEs more quickly and also to assist
with support for graduate fellows. Dr. Pastides added that it requires between $3 million
and $5 million of university funds just to recruit qualified endowed chair-holders.
Prospective chairs know they will be endowed with substantial income down the road,
but in order to leave their current tenured positions and move their families, they need
resources available right away, too. Using the accumulated program interest is one way
perhaps to “jumpstart” the CoEEs. Also, funds are desperately needed to assist with
paying for graduate students and post-doctoral positions.

Dr. Przirembel agreed, stating that it is important to make a smooth and fast transition
from award to center. The necessary package to get a CoEE up and running includes
laboratories, equipment, and graduate students/post-doctoral researchers.

President Sorensen shared that members of the General Assembly were very excited
about the prospect of recruiting outstanding scientists from all over the world to South


S.C. Centers of Economic Excellence                      Review Board Minutes August 20, 2007

                                            14
Carolina. Yet it remains very difficult to compete with the financial resources of
institutions like Duke University. These scientists do not want a down period. They
want the money flowing from the moment they arrive.

Dr. Raymond addressed the issue of spending a portion of the non-state match money.
He stated that the institutions were already contributing significant internal funds for each
CoEE. He asked the Review Board to recognize that it may take 10 years before enough
money is flowing from the endowment to implement fully an individual CoEE. The
institutions require help and flexibility to get the CoEEs implemented quicker.

Chair Harper-Bethea stated that the Review Board was aware of the present challenges
being faced—especially given the fact that the state does not typically fund more than
10% of each institution’s operating costs. She complimented the Onsite Review Panel
for its extraordinary suggestions and for the institutions’ clear responses. She stated that
the program is headed in the direction of its intended purpose, and promised on behalf of
the Review Board that it would continue assisting the institutions in their mandate to
enhance the state’s economy.

   No action taken

Discussion of CoEE Fellows Programmatic Support Proposal

Dr. Morrison presented a conceptual outline of funding for a CoEE fellow program which
had been drafted by CHE staff and shared with the institutions. The draft proposed that
the use of accumulated interest for programmatic support should be matched dollar-for-
dollar; however, the institutions did not wish to match programmatic support funds. Dr.
Morrison stated that the statute seemed to imply that the use of interest for programmatic
support required matching, as the interest must be placed back into the Lottery
Endowment. Legislative clarification needs to be sought on the issue. However, if the
proposal otherwise resonated with the institutions and the Review Board, staff would
proceed to develop a more detailed prospectus for a future meeting.

Chair Harper-Bethea said the outline was excellent, but it was indeed clear that
clarification was needed from the legislature concerning whether interest funds used for
programmatic support required dollar-for-dollar matching. She asked the institutions
whether they would like the outline to be developed into a full prospectus.

President Barker said absolutely they would. He also availed all three presidents to assist
with seeking legislative clarification on the matching issue.

Dr. Pastides added that this might also be an excellent opportunity for all three
institutions to conduct collaborative fundraising to raise money into a central pot for post-
doctoral and graduate fellowships. President Sorensen stated that all three presidents had
tried such joint fundraising early in the program, but now with the proven track record of
the CoEE Program, they were likely to be more successful.


S.C. Centers of Economic Excellence                       Review Board Minutes August 20, 2007

                                             15
Chair Harper-Bethea stated that the Review Board would approach key members of the
General Assembly on the matching question. She also requested more definitive
feedback from the institutions on the financial figures presented in the draft outline
prepared by CHE staff.

   No action taken

Consideration of Proposed Budget for CoEE Operations for Fiscal Year 2007-2008

Chair Harper-Bethea asked the members of the Review Board if they would mind
skipping ahead in the agenda to consider the program operating budget next. No one
objected. Dr. Morrison reminded the Review Board that the RCEE Act requires the
Commission on Higher Education to approve the annual operating budget for the CoEE
Program. She reviewed the proposed operating budget, which totaled $449,063 for 2007-
2008, an increase of $35,811 from the previous year. Dr. Morrison explained that this
increase was mostly accounted for the auditing contract, which increased from $25,000 to
$40,000 because the audit carried over from fiscal year 2007 into fiscal year 2008.

Brief discussion ensued. President Barker inquired whether the category Personnel
Service referred to FTE positions. Dr. Morrison confirmed it did refer to salaries for
CHE staff who worked with the program.

   Action on Proposed Budget for CoEE Operations for Fiscal Year 2007-2008

 Mr. Babb moved and Mr. Williams seconded a motion to approve the 2007-2008
  CoEE Operations Budget as drafted and presented to the Review Board. The
  motion was approved, with all members of the Review Board present voting in
  favor of the motion.

Chair Harper-Bethea thanked the members of the CHE staff present for their work and
dedication to the CoEE Program.

Discussion of Draft of Legislative Changes, Including Program Renewal, for South
Carolina Research Centers of Economic Excellence Act

Chair Harper-Bethea called for discussion on the proposed legislative changes to the
RCEE Act. She stated that while the program was clearly making a difference in the
state, certain legislative clarification were needed. Additionally, with program funds set
to run out prior to 2010, it was important for the Review Board to convince the General
Assembly that the CoEE Program is worthy of legislative renewal. She said it was
particularly important for members of the Review Board to champion the program, given
that state lottery funds were projected to decline.




S.C. Centers of Economic Excellence                     Review Board Minutes August 20, 2007

                                           16
Dr. Morrison explained that there were four major legislative changes to the Research
Centers of Economic Excellence Act sought in the proposed draft. The first change was
program renewal via legislative amendment, with $30 million from lottery funds sought
through 2010. The second change was a statutory amendment which would grant the
Review Board the flexibility to allow for a portion of the non-state match to be used for
CoEE startup costs. The third change was a statutory amendment that would clearly
allow the accumulated interest of the Lottery Endowment to be used for programmatic
support purposes. The fourth change was a statutory amendment specifically validating
the use of in-kind donations for non-state matches.

Mr. Bjorn added that pending the Review Board’s approval of this document, CHE staff
would submit a draft of the specific proposed revisions to the RCEE Act at the November
5, 2007, Review Board meeting. Chair Harper-Bethea agreed that it was a good idea for
the Review Board to prepare a text draft of the legislative revisions.

   Action on Draft of Legislative Changes, Including Program Renewal, for South
    Carolina Research Centers of Economic Excellence Act

 There was general consensus among all members of the Review Board that CHE
  staff should present a text draft of proposed revisions to the RCEE Act based
  upon the recommendations presented in the document titled Draft of Legislative
  Changes, Including Program Renewal, for South Carolina Research Centers of
  Economic Excellence Act at the November 5, 2007, Review Board meeting.

Update on Certification Matches, Draw Downs, Program Accounts, and Balances

Dr. Morrison reviewed the program financial summaries, noting that as of July 17, 2007,
of the $144 million the CoEE Review Board had approved (which included 34 CoEE’s
and 59 CoEE endowed chairs), $88.9 million in non-state matching funds had been
pledged, with $53.8 million of these non-state matching funds drawn down by the
research institutions.

Other Business

Dr. Morrison announced that on July 11, 2007, Clemson University submitted notice to
the Review Board that it was withdrawing the $3 million Restoration CoEE, which had
originally been approved at the August 30, 2004, Review Board meeting.

President Barker explained that unfortunately the donor had to be released from the
pledge commitment. Clemson felt it was appropriate to withdraw the award—although at
a future time it may consider reapplying for the Restoration CoEE, but only if the
matching funds were in-hand ahead of time.

   Action on the Withdrawal of the Restoration CoEE (Clemson University)



S.C. Centers of Economic Excellence                    Review Board Minutes August 20, 2007

                                           17
 Mr. Glenn moved and Mr. Williams seconded a motion to withdraw the August
  30, 2004, award of $3 million to Clemson University for the Restoration Center
  of Economic Excellence. The motion was approved, with all members of the
  Review Board present voting in favor of the motion.

Mr. Pearce asked what specific procedures were in place for terminating a CoEE, as Mr.
Counts had earlier advised the creation of a policy for such in the Program Guidelines.
Mr. Bjorn answered that in this particular case, Clemson had not drawn any state funds
for the Restoration CoEE; thus, there were no actual funds to return, just the award itself.

Mr. Pearce asked how many chairs had been appointed since the program’s inception.
Mr. Bjorn answered that 12 of 59 chairs had been appointed thus far. Dr. Raymond
announced that MUSC would shortly be announcing the appointment of three additional
endowed chair-holders. He also stated that at the November 5, 2007, Review Board
meeting, MUSC would request to increase the number of chairs for the Tobacco-Related
Malignancy CoEE from two to four.

Dr. Morrison announced that on July 23, 2007, President Barker had notified the Review
Board via letter that Clemson soon would be formally announcing the full $2 million
non-state match for the Supply Chain, Optimization & Logistics CoEE. Dr. Morrison
reminded the Review Board that on June 18, 2007, the Review Board had approved a six-
month pledge verification deadline extension for this CoEE. Dr. Przirembel added that
the donor was an American company.

Dr. Morrison reminded the institutions that there were new deadlines for the 2007-2008
CoEE proposal cycle. The new deadline for submission of letters of intent is September
7, 2007. Also, institutional annual reports are due on October 31, 2007. Finally, she
announced that the next CoEE Review Board meeting would be held on November 5,
2007, with the place and time to be announced.

Chair Harper-Bethea thanked the CHE staff for composing such excellent materials for
such complex program issues. She also thanked the members of the Review Board and
the institutions for their time and effort. Having no other business, Chair Harper-Bethea
adjourned the meeting at 1:10 p.m.




S.C. Centers of Economic Excellence                      Review Board Minutes August 20, 2007

                                            18

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:4
posted:10/4/2012
language:English
pages:18