Health Care Foundation of Greater Kansas City
                      Finance and Investment Committee
                             Minutes of Meeting
                             Held Tuesday, July 19, 2005

Location:     Pioneer Campus of Penn Valley Community College, 2700 East 18 th
              Street, Suite 211, Kansas City, Missouri 64127

Committee Members in attendance:
Landon Rowland, Chair
Mark Flaherty
Bishop Steve Jones
Rod Minkin
David Ross
Terry Thompson

Committee Members not in attendance:
Rev. Dr. Nelson L. “Fuzzy” Thompson (notified prior to the meeting of inability to attend)

Health Care Foundation of Greater Kansas City Board Members and associates in

Harry S. Jonas, M.D., Chairman of the Board
Gurnie Gunter, Vice-Chairman
Steve Roling, President/CEO
Dan Couch, CFO
Tracy Skidgel, Executive Assistant

Community Advisory Committee (CAC) members in attendance:
James M. Flynn, M.D.
George P. Hoech, M.D.
Al W. Tikwart, Jr.

Guests in attendance:
Jay Flaherty (Ennis Knupp)
David Keil (Ennis Knupp)
Nathan Zinn (Ennis Knupp)

The Chair opened the meeting at 8:00 a.m. by welcoming all persons present,
announcing that the committee meeting had been properly noticed pursuant to the
Missouri Sunshine Law.

Review of June 14, 2005 Minutes – Chairman Rowland requested the committee
review the minutes of the May 17th Finance & Investment Committee meeting.
Following review, Bishop Steve Jones made a motion to approve the Minutes as written.
Mark Flaherty seconded the motion. The motion was approved by unanimous voice
Discussion Regarding Finance & Investment Committee Meeting Schedule – Dan
Couch stated that in scheduling meetings of the Finance & Investment Committee it
would be advantageous if the committee would meet during the same month of the HCF
Board. Items to be considered are as follows: 1) Ennis Knupp will be providing
quarterly performance reviews in February, May, August and November; 2) financials
would be reviewed by the committee prior to presentation to the Board; and 3) the
budget cycle would be consistent. Staff recommends that the Executive Committee
meet during the off months and Finance & Investment Committee and Program/Grants
Committee meet the same month as the HCF Board with additional meetings scheduled
when necessary. The Administration & Logistics Committee has adopted to meet
quarterly and the Audit Committee meets on an as needed schedule. The committee
agreed with the recommendation made by staff.

Financial Statements dated June 30, 2005 -- The June 30 financials prepared by
Ralph Johnson accurately state the end of the second quarter. However, some
expense distributions are incorrect and a revision will be made. The month of June was
a very good month for our investments with an approximate increase in net assets of
$925,000. It was stated that we are operating well within our budget with the exception
of office supplies. We anticipate with the increase in staff this overage will most likely
continue. Dan Couch informed the Committee that the cash in the checking account is
larger than normal to provide sufficient funds to pay the Safety Net grants. The flow of
contracts was slower than anticipated; however, the funds are swept nightly and
continue to earn 2.858%. The Accrued Expenses category for the most part includes
the managers’ fees, custodial fees and Ennis Knupp fees.

Ennis Knupp Flash Report as of June 30, 2005 – Dave Keil stated that the
stocks/bonds are up and the Foundation received a return of approximately 1% for the
month of June. We are currently ahead of the benchmarks; however, we would like for
the numbers to go higher. We are seeing the benefits of diversification in our
investments and are in good shape. The committee was reminded that our benchmark
is set at 6.6%. Dave Keil still feels we will attain our long-term goal by funding real
estate and private equities.

Audit Committee Report – The Audit Committee has authorized House, Park &
Dobratz (“HPD”) to perform a special engagement to give a comfort level regarding
reporting accuracy of investment related activities. There is a significant amount of
money moving through accounts and HPD will perform tests and examine those
transactions in greater detail. This one-time special engagement will test the reporting
of investment related transactions. Anticipated cost of the special engagement is
$2,500 - $3,000. We do not expect anything incorrect to come forth but if it does we will
report. It was stated that all but one of our investments are in commingled funds and
they have their own external auditors and controls in place. The Foundation will always
have issue with bonds as they are not traded daily and the pricing is an issue as
discrepancies arise. Mary Stratman of HPD will be the lead for the special engagement
and can contact Dave Keil when necessary. If, in the future, this review is determined
necessary we can consider including the more detailed work in our annual audit. It
would be appropriate for the Audit Committee to request and review and provide an
audit process plan for future years.
Update on Form 990 – Form 990 was prepared by HPD and sent to HCF Board officers,
Committee Chairs and legal counsel for their comments. It was suggested by legal
counsel that we include the three-weeks of 2004 compensation of Steve Roling to
provide full disclosure, however it is not a requirement. Form 990 will be signed and
filed prior to the August 15th deadline. Form 990 will also be posted on the Foundation’s

Legg-Mason and Citigroup Asset Swap – Dave Keil provided a memorandum
detailing the Legg Mason, Inc. and Citigroup Asset Swap for the committee’s review and
will continue to assess the situation.

Other Business –
       CHG Accounts Payable – Tom Langenberg will be with us in September to
        discuss the current status. Rod Minkin abstained from discussion. It was
        agreed that upon request of CHG we will pay the accounts payable.
        However, it was noted that a partial distribution would pay off the accounts
        payable as CHG continues to hold the $20 Million holdback as well as the
        three properties.
       GMO Fund Transfer – Dan Couch provided a memo detailing the transition
        of the GMO funds that resulted in a realized gain. The committee discussed
        an ongoing concern of maintaining the public charity status.
       Ariel 12b-1 Fee Recovery – We have signed a contract with Lynch Jones
        and have notified Ariel. There is nothing further to do at this time.
       CDARS Investment – The CDARS investment with Douglass National Bank
        was discussed at length and it was determined that staff will evaluate
        investment returns and provide the dollar cost and return to the committee for
        an appropriate recommendation to the HCF Board. If approved, the
        Foundation will limit their investment in the CDARS program to $2 Million.
        The following questions are to be discussed: 1) Dave Keil will rerun figures
        and provide cost information; 2) How are funds used by participating banks?
        3) List of participating CDARS banks in our area; and 4) Action of CHG
        regarding our request to consider CDARS on the $20 Million holdback.

Dave Keil of Ennis Knupp introduced Nathan Zinn also of Ennis Knupp and who
specializes in real estate.

Real Estate Manager Interviews –
       Prudential Investment Management presentation was provided by Cathy
         Marcus and Kevin P. Smith.
       RREEF presentation was provided by Jon Thompson and Frank Garcia
       UBS Global Asset Management presentation was provided by Larry Dobb
         and Ann Dakille.

Following the interview each organization was requested to provide references, local if
possible, to Dan Couch, CFO.

Dave Keil directed the Committee to the Manager Search booklet which detailed the
criteria followed in recommending the three as well as performance factors, product
factors, organizational factors and manager scoring forms. Dave also stated that the
appraisal process is very important in real estate as we are buying-in when someone is
coming out. In providing their recommendations, Ennis Knupp tried to select managers
that would compliment each other. With two managers (all commingled and diversified)
it will be easier to put money in or take money out.

Prudential stated it would take approximately four quarters to start and be fully invested.
RREEF stated it would take six months for the initial investment and six to twelve to be
fully invested and UBS stated it would probably be one year before the call.

Following discussion, Rod Minkin made a motion to engage and invest in Prudential
Investment Management and UBS Global Asset Management pending a check of their
references. David Ross seconded the motion. The motion was approved by
unanimous voice vote. We will request HCF Board approval at the August 18 th Board

The next scheduled Finance & Investment Committee meeting will be September 20,
2005, from 9:00 a.m. to 10:30 a.m., 2700 East 18th Street, Suite 211, Kansas City,
Missouri 64127.

Meeting adjourned at 11:50 a.m.


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