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05-08-12 Cal Poly Corporation Board of

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									                          BOARD OF DIRECTORS ANNUAL MEETING
                                    Friday, May 18, 2012
                            Corporation Administration Building 15
                                   Conference Room #124
                                              Fiscal Year 2011-12

                                                   MINUTES

Present: Jessica Bell, Penny Bennett, James Brabeck, Larry Kelley (left at 11:32a.m.), Bill Kellogg, Betsy
          Kinsley, Tom Lebens, James Lokey, Cornel Morton, Solomon Reda, Dave Wehner (left at 9:30a.m.)

Guest:    Xenia Bixler, Deborah Read, Kiyana Tabrizi

Staff:    Philip Davis, Dustin DeBrum, Taffy Duran, Tammy Farrell, Wendy Forester, Lynnette Held, Pat
          Hosegood Martin, Theresa Kaiser, Starr Lee, Joanne Mead, Melissa Mullen, Yukie Nishinaga, Eumi
          Sprague, Mike Thornton, Grant Trexler, Ron Weaver, Greg Yeo

Chair Larry Kelley convened the meeting at 8:32a.m.

Larry introduced Deborah Read to the Board. Deborah comes to Cal Poly from the University of Dayton and
has a wealth of experience in fundraising and alumni relations.

Debbie thanked Bonnie and Larry for inviting her to address the Board. She stated that at the April 28, 2012
Foundation Board of Directors meeting, she presented to the Board a work in progress plan, funding, and staff
needs over the course of the next month to several years. She also presented details of the next fundraising
campaign itself. It will probably be a seven to eight year campaign. The working goal that has been put forth is
multi-million dollar, but may be closer to $500 million. A feasibility study was conducted that began in the fall
of 2011 and ended this past April. At that time it was learned through feedback from conducting 52 interviews
that there is a lot of potential at this institution. The themes that were shared were very positively received, but
University Advancement needs to focus its efforts on communicating that the future of the University is in
support of the students.

Larry introduced and welcomed ASI President Kiyana Tabrizi to the meeting. Kiyana personally thanked the
Board and the Corporation on behalf of the students for all the hard work they do behind the scenes and
explained that without the Corporation’s support ASI could not do a lot of things they do. She has had the
privilege this past year to observe and understand what goes on behind the scenes to support products for
students. There is a lot of hand work done at all levels.

Larry stated that there are several Board members moving off the Board. He thanked Student Directors Jessica
Bell and Solomon Reda for their service and contribution to the Board. He presented them with a
Commemorative Resolution from the Board for their service and a book about Cal Poly.

Directors Cornel Morton and Bill Kellogg are also leaving the Board. Cornel has served for the past several
years and appreciates his role as a director. Bill Kellogg has serviced on the Board for 15 years and Larry
thanked him for his many years of service and wished him well.

Bill commented that it is his firm belief that the Corporation plays a very critical role on this campus. It has
been his pleasure to serve on the Board.
                                                                                                     Attachment I-A
                                                                          Cal Poly Corporation Board of Directors
                                                                                   Meeting Minutes May 18, 2012
                                                                                                         Page 2


Cornel commented that he too wanted to thank the Board, Bonnie, Larry and the Corporation for all they do.
He also wanted to thank Ann Roy for all that she does and for keeping him on his toes.

I.    MINUTES
      A. Board Meeting Minutes - January 27, 2012
         Larry Kelley asked for a motion to accept the minutes as presented with concurrence from the
         Board.
         (none opposed)

II.   UPDATES
      A. Executive Director
         Bonnie welcomed Wendy Forester back from maternity leave. This summer CPC will have one
         more change; Yukie Nishinaga is getting married in July to Chris Murphy.

           Old Business:
           Board Retreat - Bonnie thanked the Board for attending the bi-annual retreat and for sharing their
           ideas and thoughts for the coming year.

           Year End Results - Bonnie thanked the CPC staff for another productive year.

           This will be the last year CPC will be sending out paper documents to the Board of Directors. All
           Board items will be available online and on the iPads that will be provided at Board meetings.
           The CPC team worked on enhancing and streamlining the budgets so they are easier to read.
           Wendy set-up the budget templates before she went on maternity leave, except for the Bella
           Montaña budget which was added later.

           University Updates - Three final candidates have been selected for the Dean for the College of
           Liberal Arts and a decision will be made shortly. The Dean for the College of Architecture and
           Design position has been posted. The final candidates for Cal Poly’s Chief of Police position will
           be on campus at the end of month.

           New Business:
           Benchmarking Surveys – CPC will be sending out surveys this coming year to the operations and
           Customers to receive feedback on how CPC is doing. Some of the surveys will be directed
           towards certain customers for example in Sponsored Programs. CPC is hoping to push the
           surveys out before students and faculty/staff leave for summer.

           Non-Core Budgets - All budgets were reviewed and had no issues. CPC will send out copies of
           the non-core budgets to the Board at the end of June.

           UGS Business Update - Harvey Levenson and students were not able to present today. They will
           be presenting to the Board in the fall.

           AG Business Report - Dave Wehner reported that some of the opportunities that the Ag
           Department provides, CPC is heavily involved in. He read the College of Agriculture Food and
           Environmental Sciences (CAFES) mission statement to the Board.

           Dave Wehner reported on the following:
           CAFES consists of 3,700+ students, nine departments, and sixteen majors. All programs are
           laboratory intensive and the students have many opportunities outside the classroom to be
           involved in programs and experience “Learn By Doing.”
                                                                Cal Poly Corporation Board of Directors
                                                                         Meeting Minutes May 18, 2012
                                                                                               Page 3

Examples of some of the programs are:
    Poinsettia Plant Sale
    Chocolate Project
    Cal Poly Cheese

CAFES offers a wide range of activities through:
    Event management classes - service learning classes, marketing and engineering projects.
    Enterprise project classes - students gain experience, do not earn a wage, but receive
     academic credit.
    Enterprise projects - students are responsible for all aspects of the project; they share in
     the profits and receive academic credit.
    Commercial projects - students gain experience, such as at the dairy, and are paid.
    Volunteer - students gain experience but do not receive a compensation.

The Recreation Parks and Tourism Department ran, planned, and conducted the 2011 International
Ecotourism Society Conference. This conference was held in South Carolina.

In February the Western Bonanza Junior Livestock event was held. This is the largest show of its
kind on the West Coast. At this event there are 1000+ animals and 450 exhibitors. Also involved
are 106 Cal Poly students and 25 managers.

Some of the Animal Science projects include commercial and enterprise beef production, bull
tests, sheep, swine, and horses for sale, horse breeding services, poultry egg sales, grow broilers
for foster farms, and meat sales.

The Gallo vineyard project is 100 acres. CAFES provides the land and water and Gallo provides
the routine maintenance. This project gives students opportunities to do internships and research
projects. Gallo makes monetary donations to CAFES for the use of the land.

CAFES has the only dairy except for one in Moss Landing on the whole coast of California that is
still in production. The creamery is operated by students. There are 250 milking head, 1
technician, and 23-25 students, 12 of which live on site. This project has a positive cash flow and
sales of $280,000 a year.

The crops department grows a lot of different vegetables and plants. The students are responsible
for harvesting and in some cases they take it to farmers markets or sell it as a commodity to a
broker.

The state provides land, water, utilities, and faculty member’s time on all the projects. The
projects pay for all other costs including technician’s salary and benefits. CPC charges CAFES
$200,000 to conduct business processes. All of the projects generate $3 million in sales per year.
The benefits come with challenges; students make mistakes, liability issues, and the scale of
production is sometimes not large enough to be profitable. The local community is very
supportive of Cal Poly products and the payoff exceeds the costs. CAFES has a $2 million
endowment to help cover the costs for providing hands-on learning opportunities and pledges
currently over $1.3 million.

Animals are now being processed at the J and G Lau Family processing center on campus.
CAFES received $5 million in private donations and $1 million in state money to build the
processing center.

CAFES is looking to open a Cal Poly Farm Store within the next year that will provide a
                                                                             Cal Poly Corporation Board of Directors
                                                                                      Meeting Minutes May 18, 2012
                                                                                                            Page 4

            centralized location for retail sales of all products. CAFES will start out with a temporary
            building.

III.   BUSINESS ITEMS
       A. Election/Appointment of Cal Poly Corporation Officers
          M/S/P (Brabeck/Lebens) that the Board approve the Election/Appointment of Cal Poly
          Corporation (CPC) Officers and Directors.
          Jim Lokey reported that the Student Director positions will be appointed at a later date.

            President Armstrong accepted the Academic Senate nomination of Kim Shollenberger to replace
            Bill Kellogg for a three year term. Mike Miller has been appointed to a three year term to replace
            Cornel Morton.

            Community Director’s Jim Lokey, Jim Brabeck and Tom Lebens were appointed and agreed to
            serve another one year term.

              President Armstrong nominated the following names for the slate of officers for FY 2012-13:
                                                Chair - Larry Kelley
                                             Vice Chair - Betsy Kinsley
                                        Secretary/Treasurer - Dave Wehner

       B.   Allocation of APBO Funds to Trust(s) and Reserves
            M/S/P (Brabeck/Kellogg) that the Board
                    1) Approve the setting aside of APBO Funds into dedicated Trust and Reserve
                    Accounts to ensure availability for Post-Retirement Medical Liabilities, and

                    2) Authorize the Executive Director, with approval of the Chair to select the Trust
                    and/or Reserve Fund, and to determine a prudent allocation of funds, and

                    3) Authorize the Investment Advisory Committee to recommend investment
                    strategies on the fund.

            Trexler reported that as medical care costs continue to rise, the liability of CPC for retiree
            employee medical care costs also rise, particularly under CalPERS. In order to ensure that funds
            will stay available for the long term liabilities for the retiree employees, CPC would like the
            Board to approve setting aside the APBO funds and future funding into a trust or other financial
            vehicle designated for this purpose and to authorize the Executive Director to select the Trust
            and/or reserve fund. CPC’s current long term liability is estimated to be over $20 million.

            There are several Trust options for management to consider. Some of these options have been
            developed to provide government employers with a trust through which they can prefund retiree
            post-employment benefit costs. Most of these plans limit the investment choices available to the
            participating entities.

            If CPC starts its own Trust, we have control over the investment choices, but if it chooses to join
            other trust vehicles it limits the investment choices available to CPC. Auxiliaries that have joined
            the CSU Multiple Employer VEBA Trust have more than $47 million in liabilities but have only
            funded $6 million into the VEBA Trust, whereas the Corporation has funded more than 85% of its
            post-retirement health care liabilities.
            CPC is looking to secure these funds for its current and future retirees. If CPC does not set aside
            these funds into a separate Trust, they could be used for other purposes. This risk increases as
            state funding for the University continues to diminish.
                                                                     Cal Poly Corporation Board of Directors
                                                                              Meeting Minutes May 18, 2012
                                                                                                    Page 5


C.   FISCAL VIABILITY REPORT
     M/S/P (Lokey/Brabeck) that the Board approve the proposed changes to the reserve goals
     and accept the Fiscal Liability Report.
     Trexler reported that every year CPC has provided the Board with the reserves balances for its
     operations. The Fiscal Viability report compares CPC reserves to the established reserve
     guidelines in Policy 109 and it also is proposing changes to two guidelines and to add additional
     reserves. Current operating reserves are generally three months of the following year’s budget
     while capital replacement reserves hold long term funds that are set aside for major capital
     improvements. CPC has adequately funded its reserves.

     UGS did not meet its reserve goal. The shortfall was the result of an unexpected charge for its
     post-retirement health care costs in fiscal year 2010-11. Based on its current budget, it is
     anticipated that UGS will be in compliance with its reserve guidelines as of June 30, 2013.

     There are two new post-retirement health care reserves that are being proposed. The first one is
     the Sponsored Programs reserve. This reserve would be funded through transfers from the two
     existing reserves as well as cash contributions over the next five years. The second is the general
     post-retirement health care reserve. This reserve would be funded through a transfer following the
     FASB to GASB liability conversion at year end.

D.   Approval of Proposed General Administrative Services Operating Budget
     M/S/P (Lokey/Lebens) That the Board Approve the Proposed 2012-13 General
     Administration (G&A) Services Operating Budget.
     Trexler reported that the budget for revenues is projected to decrease by $50,000 in assessments.
     This was based on the California Specialized Training Institute (CSTI) anticipating closure this
     past December; however CPC recently found out they are not going to close. CSTI will continue
     to be a significant part of CPC’s operations and is a highly profitable contract for CPC. Payroll
     and related costs are expecting to continue to decline, mainly due to the alternative investment
     schedule. Operating expenses are projected to increase primarily due to deprecation of upgrades to
     CPC’s computer network. CPC budgeted $200,000 less in transfers, as G&A’s budget is
     supported by CPC’s investments due to reduced expenditures.

     Challenges for the coming year will be to:
          Move from FASB to GASB reporting.
          Create electronic files for all endowments.
          Expand availability of direct deposits.
          Implement employee on-line to allow employees to see their w-2 and paychecks on line.

     Reserves are expected to meet goals. CPC’s most significant capital outlay request is IT upgrades
     and software related.

E.   Approval of Proposed Plant Fund Operating Budget
     M/S/P (Kellogg/Lebens) That the Board Approve the Proposed 2012-13 Plant Fund
     Operating Budget.
     Trexler reported that the plant fund controls the operations of CPC Administration Building, CPC
     warehouse, and the accounts payable trailer.

     In the past year lots of activity took place. A new roof was placed on CPC’s Administration
     building, repairs were made on the warehouse roof, and accounts payable moved out of the trailer
     and into the CPC Administration Building. A backup generator was also installed at the
     Administration building so in case the building loses power, computers operations can continue.
                                                                      Cal Poly Corporation Board of Directors
                                                                               Meeting Minutes May 18, 2012
                                                                                                     Page 6


     Revenue is expected to decline. Revenue in the plant fund is internal revenue for the fees charged
     to departments within the Corporation for the facilities and space they occupy. The decline in
     revenue is due to accounts payable department moving into the CPC Administration building.
     CPC hopes to sell the trailer by the end of August. Expenses are expected to decrease except for
     depreciation which increased due to the new roof that was installed.

     Fiscal challenges will be working with the state to integrate distribution services at the CPC
     warehouse. State will be occupying 30% of the warehouse plus some common space by July 1,
     2013.

     CPC is anticipating having $4.8 million set aside for reserves at June 30, 2013.

     There are two capital outlay items being requested. The first is fire and life safety upgrades. CPC
     met with the State Fire Marshall over the last year. A new fire alarm system will be installed in the
     CPC warehouse and Administration building and in addition will need to move sprinklers that are
     not up to code. State Fire Marshall has also requested that the warehouse be equipped with a
     sprinkler system. The second request is for audio visual equipment for the Board room in the
     CPC Administration building.

     Kellogg asked if the mail distribution center will be paying rent to CPC since they will be
     stationed out of the CPC warehouse. Grant responded that the warehouse is actually a state
     building and CPC will not be receiving any rent, but there will be a reduction in what CPC pays
     for utilities at the warehouse.

F.   Approval of Proposed El Corral and Cal Poly Downtown Operating Budget
     M/S/P (Brabeck/Cornel) That the Board Approve the Proposed 2012-13 El Corral and Cal
     Poly Downtown Services Operating Budget.
     Phil Davis reported that he first came to El Corral Bookstore in July 1997 as Associate Director of
     Operations and has been the Interim Director since January 2012. He thanked Tammy Farrell,
     who is El Corral Bookstore’s Financial Accounting Coordinator. Tammy was the key person in
     the preparation of the bookstore’s budget.

     Looking at the current year, the textbook market is changing. Textbook rentals have depressed the
     sales of used books. Used books are less expensive than rental books if the used book will have a
     retail buyback price. Surprisingly, sales of new books have increased with the growing use of
     custom texts, which never have a wholesale buyback market and frequently have no retail
     buyback market.

     Because textbook reservations seemed to no longer provide a service that customers fully used or
     valued, it was decided to only offer textbook reservations for the fall term. In the winter and
     spring terms an online order service was used that allowed for the delivery of textbooks to
     addresses on campus as well as off campus.

     In fall 2011, online textbook rental was added in partnership with Rafter. Online rental offers far
     more titles than in-store rental, plus the convenience of pick-up and return at the bookstore.

     For the first week of winter term, to make it easier to buy course materials and other merchandise,
     the bookstore extended its hours. The day before classes began, the bookstore was opened from
     8a.m. until midnight and on class days the store was open from 6a.m. to midnight. In the spring
     quarter the same hours were offered again.
                                                                      Cal Poly Corporation Board of Directors
                                                                               Meeting Minutes May 18, 2012
                                                                                                     Page 7

     In January, El Corral began a re-organization, cross training of the staff, and a re-direction of the
     business to provide the goods and services that Cal Poly will need and expect. Yukie Nishinaga is
     now responsible for the marketing of the bookstore. Re-marketing the bookstore has included the
     installation of historical and athletic window graphics and signage and advertising that is fresh,
     attractive, professional, and effective. Yukie and Dustin DeBrum worked together and added the
     bookstore and Cal Poly Prints to the Cal Poly Mobile Apps.

     El Corral Bookstore’s new name and logo should be announced by the end of May, along with the
     winner of the Piaggio Scooter.

     Over summer 2012 and in fiscal year 2012-13 the bookstore will be:
           Testing the Rafter in-store textbook rental program as a replacement for the in-store rental
             program.
           Renovating the main sales floor.
           Adding six overhead TV/Monitors in the center of the store.
           Employee dress code will be instated.
           Apple iPads will be available for rent.
           Online textbook buyback will be offered.
           Looking at re-engineering Operating Processes.
          
     Phil commented that he would like to emphasize that the bookstore re-organized, not re-created, a
     staff that was Frank Cawley’s legacy. The re-organization drew on the staff’s existing skills and
     used the staff in different roles.

     The Board took a 13 minute break and reconvened at 10:28a.m.

G.   Approval of Proposed Campus Dining Operating Budget
     M/S/P (Kellogg/Brabeck) That the Board Approve the Proposed 2012-13 Campus Dining
     Services Operating Budget.
     Mike Thornton reported that Campus Dining provides services in support of the educational
     mission of the university and the students.

     Campus Dining has two sources of revenue: meal plans and Plu$ revenue, and cash, credit cards,
     and campus express.

     This year there were 700 extra freshmen that were not anticipated. This accounted for $18.5
     million in meal plan revenue which was $2.4 million more than budgeted. There will not be an
     increase in meal plans for the coming year. Meal plan revenue for next year is budgeted at $16.3
     million.

     The 2011-12 income estimate was budgeted at $24.2 million and it is anticipated to end the year at
     $26.7 million. Venues that were doing 2,000 transactions a day are now doing 3,600 a day.

     Labor is budgeted to increase in fiscal year 2012-13. The increase is because of the efficiencies in
     fiscal year 2011-12 and the extra meal plan money. The 2012-13 budget reflects Campus Dining’s
     traditional numbers that are normally projected.

     Projects and visions that are planned are:
          Starbucks will have a second location in the Campus Market.
          Vista Grande Remodel.
          Building 19 Renovation planning.
          Subway is projected to open in the fall.
                                                                      Cal Poly Corporation Board of Directors
                                                                               Meeting Minutes May 18, 2012
                                                                                                     Page 8

     Once approved, all of these projects will be completed over the summer.

H.   Delegation of Authority for Housing Operations
     M/S/P/ (Brabeck/ Cornel) That the Board delegate authority to the Executive Director, or
     her designee to (1) Manage the daily operations of the Bella Montana Development; (2)
     Make changes in a unit’s status as for rent or for sale; and (3) Sell units at the approximate
     valuation with sublease restrictions based on recent sales, listings, and/or recent appraisals
     of comparable units.
     Starr Lee reported that CPC currently owns 13 units, 11 of which are available for sale or are
     rentals, and two units that are owned by CPC were purchased with Orfalea endowment funds for
     the benefit and exclusive use of the Orfalea College of Business (OCOB). CPC manages its rental
     units as well as provides property management of the two OCOB units, from leasing and repairs
     to fee collections.

     The delegation of authority to the Executive Director will enable CPC to make timely decisions of
     when to sell the remaining CPC owned units and will allow negotiation of the sale within the
     guidelines set by this authority.

I.   Approval of Proposed Bella Montana Operating Budget
     M/S/P (Brabeck/Lebens) That the Board Approve the Proposed 2012-13 Bella Montana
     Operating Budget.
     Lee reported the budget looks different on the variances because it only reflects five months from
     when CPC assumed all CPHC’s assets and liabilities once CPHC dissolved into CPC. There is
     one mistake where the net from operations should reflect the 2012-13 variance of the negative 49.
     It is a very large variance but is based off of months in 2011-12 versus a full year in 2012-13. The
     sales for 2012-13 are reflecting the sales incomes of one sale unit and income based off of eight
     units. During the upcoming year CPC is looking to place more units up for sale. Operating
     expenses are a little more proportionally higher than what is reflected in the five months. This is
     because as you roll units from a rental unit to a sales unit, there are more repairs and maintenance
     to ready the unit for market.

J.   Approval of Proposed Sponsored Programs Services Operating Budget
     M/S/P (Lebens/Cornel) That the Board Approve the Proposed 2012-13 Sponsored Programs
     Services Operating Budget.
     Xenia Bixler presented the pre-award side before the awards are received and granted and
     administered by CPC.

     Grants Development Office (GDO) provides assistance to Cal Poly faculty, administrators, and
     staff engaged in extramurally-funded research, curriculum development, student support, and
     community projects. Last year there were 4 analysts that handled 367 proposals.

     GDO also helps faculty:
         Identify potential sources of federal, state, local government, and private funding.
         Assist with proposals and statement work.
         Prepare required campus and sponsor forms and obtain campus approval.
         Ensure contract compliance.
         Facilitate proposal submission, discussions and contract acceptance to ensure a smooth
          transition to post-award management.

     Funding in fiscal year 2008-09 was the largest year with $29 million in grants. During the
     recession GDO experienced a nose dive down to $20 million in 2009-2010, but through the
     tenacity of the faculty they still continued to put in proposals and grants increased up to $26
                                                                    Cal Poly Corporation Board of Directors
                                                                             Meeting Minutes May 18, 2012
                                                                                                   Page 9

million in 2010-11 and this year is on track to do about the same. The difference this year is that
the federal awards are lower but the state awards have increased. The other change is the College
of Agriculture for years was the big college in terms of sponsored programs research.
Engineering has become the leading college for awards.

Featured awards for this year are:
     Susanne Phelan - National Institutes of Health ($3.3 million), Prevention of Postpartum
      Weight Retention in low income women.
     Jordi Puig-Suari - National Reconnaissance Office via NASA. Auxiliary Payload
      Integrating Contractor (two awards: $601,254 and $594,443).
     Gour Choudhury - Multiple Agriculture Research Institute and food industry sponsored
      projects ($959,821).

Melissa reported on the post award. Sponsored Programs has three teams and they work very
closely with the GDO. When the awards come in, the teams work in support of the primary three
colleges engaged in research activities; Agriculture, Engineering, and Science & Math.

Once Sponsored Programs accepts the award for the GDO and negotiate on behalf of the
organization they:
     Assess the award and work closely to manage the financial and administrative support.
     Ensure compliance issues are addressed.
     Advise if there should be significant changes.
     Engage in property inventory.
     Close out award.

The Sponsored Programs office also manages other activities such as fees for service, centers and
institutes, and other activities.

The F&A rate is the overhead rate that has been approved to charge for activities. Sponsored
Programs proposal for the new F&A rate is due at the end of the fiscal year; however, in support
of the recommendation by the University, Sponsored Programs is seeking an extension.
Therefore, the F&A rate cost is not included in the Budget.

There are no changes budgeted in the Sponsored Programs staff for the next fiscal year. Due to
the economy being weaker in certain areas, Sponsored Programs is taking a modest and
conservative approach when looking at their projected revenue. Revenues are budgeted to be
slightly lower. Salaries and operating expenses are budgeted to have a slight increase next year.
Overall the budget is relatively flat.

Activity is up the first three quarters of this year compared to last year, activity is up $1.3 million.

College of Agriculture, as far as expenditures, has surpassed the College of Engineering in grant
activity. College of Agriculture is at $4.3 million and up $750,000 compared to the same period
last year. College of Engineering is up $600,000 over the same period last year. College of
Science and Math has increased $200,000. College of Business and Liberals Arts both had
modest increases.

Melissa Mullen reported that Dr. Marshall was granted a project from NASA to build a
computerized model and bring it into a 3-D model. This 3-D model was tested in a wind tunnel.
The model was to be a Hybrid Winged Low Noise ESTAL (extreme short take-off and landing).
Cal Poly students worked and have finished the testing of the Amelia. The testing took place at
the NASA Ames Research Center in Moffett, CA, which is the second largest wind tunnel facility.
                                                                          Cal Poly Corporation Board of Directors
                                                                                   Meeting Minutes May 18, 2012
                                                                                                        Page 10

          She presented a slide show of the Amelia and of the NASA Ames Research Center.

          She highlighted another project - Jordi Puig-Suari ALANA project by showing a YouTube video
          to the Board of an actual launch of the Cube Sat.

IV.   REPORTS
      A. Quarterly Investment Report, March 31, 2012
          Weaver reported that short term assets have $6.8 million in money market and CD. The only
          change in short term is the loan that CPHC had with CPC dropped off when the Corporation
          assumed the assets of CPHC. CPC is down to one advance loan that was made to the College of
          Engineering for the Plaza Landscape and has a balance of $500,000.

          CPC has a couple of stand-alone mutual funds in the general fund and both are PIMCO Funds.
          As of March 31, the short-term fund was down 0.7% at December 31, but is now at 0.8%. During
          the quarter, these funds went from underperforming to beating the benchmark. The low-duration
          funds are at $9.8 million. These funds have a duration of 3.5 years. This fund went from a 0.5%
          loss to a 1.2% gain or a 1.7% switch for the quarter and is beating its benchmark.

          The Corporate pool is CPC’s largest investment pool and was at $22.4 million on March 31. It
          had a great turn around through the quarter. It went from a 6.4% loss to 1.6% gain but is still
          behind its benchmark.

          As of last Friday, Kaspick gave an update to CPC. Through last Friday CPC has given up some of
          the gains that were realized in the third quarter and are back down to 0.5% loss.

          The Student Investment Management Group (SIMP) is managed by senior project students in the
          Orfalea College of Business. The students are required to present either to the CPC Board or to
          the Investment Committee once a year. Due to scheduling conflicts, it worked out better for the
          students to present to the Investment Committee this year and did so last month.

          SIMP has been in existence since 1992 when the College of Business and CPC partnered in
          support of the students. CPC gave the College $200,000 of CPC money to manage. The money
          and all the earnings still belong to CPC; SIMP is just managing it for CPC. The high point for the
          SIMP group was in early 2000 when they grew the $200,000 up to $725,000. Later that year, the
          Investment Committee felt that this amount was more than they needed to meet the educational
          goals of the fund and placed a cap on the amount of assets at $500,000. The program has been
          successful over the years both in investment and in giving students real life experiences.

          SIMP’s asset value is at $487,500. They had some challenges this past year. They are not fully
          invested which means they had money sitting in cash and were not able to take advantage of the
          uptake in the market in the third quarter of the fiscal year. They are down 6.7% versus their
          benchmark of positive 8.4%.


          The APBO fund is at $22.4 million in the long term investment pool plus $1.5 million in CD’s for
          a total of $24 million set aside for retiree medical benefits, liabilities and expenses. APBO had a
          great third quarter and is up 2.4% but still lagging its benchmark. Through last Friday it is at a
          positive 1.2%.

          CPC has an Endowment Fund with eleven endowments that indirectly benefit Cal Poly. They are
          at $4.7 million. Through March 31 fiscal year-to-date returns are 1.6% and are underperforming
          its benchmark. As of last Friday, the Corporate Pool is at a negative 0.5% return.
                                                                            Cal Poly Corporation Board of Directors
                                                                                     Meeting Minutes May 18, 2012
                                                                                                          Page 11


            The Grant & Annuity Society at March was just below $1.8 million. It had a return of 2.3% and
            underperformed its benchmark of 3.1%. This pool has activity in and out in addition to whatever
            the investment return is. Every quarter CPC makes a distribution to the beneficiaries in the amount
            of approximately $25,000. It is also a very popular program; therefore, CPC continually has
            contracts and money coming in. This particular quarter CPC also had some contracts mature,
            which means money went out. Two contracts matured and took $174,000 out of the pool. Of the
            $174,000, CPC kept $4,000 to benefit the Center for Coastal Marine Science and the rest went to
            CPF.

       B.   Quarterly Financial Report, March 31, 2012
            This report was included in the General Administrative Services Operating Budget presentation.

V.     CLOSED SESSION
          Closed Session in accordance with California Education Code, Section 89920, et seq.

            The Board convened into closed session before the reports section of the agenda at 11:12a.m. and
            reconvened at 11:30a.m.

            The Board approved the following motion during closed session:

            The Board authorizes the Executive Director, with Chair approval, to execute a revised services
            agreement with the Cal Poly Foundation for business support services and that Board accepts
            the revised budget reflecting changes to Corporation operations and personnel.
            M/S/P (Brabeck/Cornel)

VI.    Announcements
       A. Tentative Board Meeting Schedule 2012-13
           October 26, 2012
           February 1, 2013
           April 26, 2013
           May 31, 2013

VII.   ADJOURNMENT
           M/S/P (Lebens/Kellogg)
           No further matters appearing, the meeting was adjourned at 11:53a.m.

Respectfully submitted,


________________________
Ann Roy
RECORDING SECRETARY

								
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