BOARD OF DIRECTORS MEETING #3
Friday, April 26, 2013
Corporation Administration Building 15
Conference Room #124
Fiscal Year 2012-13
MINUTES
Present: Penny Bennett, James Brabeck, Larry Kelley, Betsey Kinsley, Thomas Lebens, James Lokey, Mike
Miller, Christopher Nielsen, Kim Shollenberger, Dave Wehner
Absent: Nathan Honeycutt
Guest:
Karen Aguilar, Preston Allen, Brian Dietterick, Annie Holmes, Keith Humphrey, June Serjeant,
Fatma Spanton
Staff:
Jenna Bailey, Dustin DeBrum, Taffy Duran, Lynnette Held, Starr Lee, Joanne Mead, Bonnie
Murphy, Yukie Nishinaga, Mike Thornton, Ron Weaver
Chair Larry Kelley called the meeting to order at 8:30AM
I.
MINUTES
A. Board Meeting Minutes – February 1, 2013
Kelley asked for a motion to accept the February 1, 2013 minutes as presented with concurrence
from the Board. (none opposed)
II.
UPDATES
A. Executive Director
Bonnie commented that she is expecting Keith Humphrey, Vice President of Student Affairs, to
arrive in a few minutes and she will introduce him to the Board when he arrives.
Bonnie reported on the following updates:
Dave Christy, Dean of Cal Poly’s Orfalea College of Business (OCOB), will be leaving the
university in mid-summer to take the position of Provost and Senior Vice President for
Academic Affairs at Baruch College in New York. Dave has been the Dean of OCOB since
2004. As of today no replacement has been named.
There is a desire to move the entire CSU system to a common calendar thus the discussions have
centered on the benefits of a common calendar versus individual campus preferences. A
decision was made that the quarter-based campuses should convert to semesters in phases with
Cal Poly being the last phase. Cal Poly will begin the process of converting to semesters be the
end of the decade.
The Joint Advisory Council Day Gala is scheduled for May 2. Everyone is being encouraged to
wear green for this day’s activities. Corporation (CPC) has purchased green CPC and Cal Poly
shirts for all the CPC Board members.
Attachment I-A
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Meeting Minutes
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Invitations were sent to all the CPC Board members for the Green and Gold Gala Dinner that is
being held on the night of May 2. Murphy commented that she was informed that some of the
Board members did not receive their invitations to this event. She asked that if any Board
members would like to attend to please fill out the RSVP card for themselves and their guest that
Yukie is currently handing out. Bonnie also commented that CPC will be paying for all Board
members and their guests to attend this event.
An E-report was sent out earlier this month with an update on the University Store. Mike
Thornton will be presenting a full update for the year at the May 24, CPC Board of Directors
meeting.
CPC Administration has reviewed all of the non-core budgets and they all are showing a positive
net to reserves. Copies of the non-core budgets will be distributed following the May CPC
Board meeting.
Al Smith Day is April 28th at Swanton Pacific Ranch. This annual event is to recognize Al
Smith for all of his contributions.
Mustang Madness is Saturday, May 18. The theme is “Let’s Get Ready to Rodeo.” If any of the
CPC Board members would like to attend, please let CPC know by today.
CPC Board of Director’s Retreat is tentatively scheduled for Friday, February 28th at Swanton
Pacific Ranch.
Bonnie commented that there are several students that CPC would like to recognize for the
exceptional work they did on the University Store windows and video walls. The students who
worked on the display windows are Melissa Shi, Max Warman, My Linh Pham, Olivia Freasier,
Ali Keenan, and Samantha Aisawa. The two students who worked on the videos for the video
wall are Sara Arroyo and Jonathan Tipton-King.
Bonnie Murphy introduced Keith Humphrey to the Board.
Keith thanked the Board for having him here today and he is looking forward to partnering with
the Corporation, Campus Dining and the University Store.
III.
REPORTS
A. Conference and Events
Fatma reported that Conference and Events (CEP) has a brand new team in place. The staff
currently consists of three full time conference coordinators, a conference center office
manager, students, and interns.
CEP partners with Housing, Campus Dining/Catering, University Scheduling, ASI, PAC,
Facility Services, and University Police Department.
CEP provides services to internal and external clients. Internal clients include:
• President’s Office
• Athletics
• Agriculture
• Engineering
• Business Education
• Physics
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Meeting Minutes
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• Architecture
External Clients include:
• FFA State Advisory
• Fish and Game
• California Agriculture Teacher Association
• California Scholastic Press Association
Some of the services CEP provides to clients are the coordination of On-Campus Housing
accommodations, campus facility reservations, food and beverage service, complete registration
and reporting services, and liability and insurance.
CEP has a very professional staff and is very familiar and up-to-date on all the rules and
regulations regarding conference and events that their clients are looking to hold. They are a
one stop shop that can provide all the services needed to plan and execute any conference, camp,
or event.
CEP’s current marketing is by word of mouth. They are looking at growing the department by
being attentive and establishing a professional work relationship with all their clients and
building stronger relationships with University departments and entities.
B.
Swanton Pacific Ranch
Brian reported that Swanton Pacific Ranch (SPR) is managed by the College of Ag and is owned
by CPC.
Brian reported on the following:
Forest Management: Valencia Creek property is harvested on average every 3-4 years. SPR had
scheduled harvest in 2008, 2011, and because of the timber damaged during the Lockheed fire,
they had a salvage harvest in 2010. SPR had netted over $500,000 in timber revenue from over
two million board feet. Revenues come back to the ranch to support its base budget and to help
accomplish things that the ranch would not otherwise be able to afford.
Livestock Management: The stocker lease operation has over 500 head of cattle that are
transported to SPR from Hawaii with the main goal of the cattle gaining weight. The cow/calf
herd sales; in the spring some of the calves are sold and others graduate into the natural beef
enterprise. The resident herd has increased in recent years and this is due to SPR sustainable
practices in rangeland management and water development. The demand for SPR natural beef
products that are sold locally and through Cal Poly Meats has increased.
Crop Management: The organic apple orchard has over fourteen varietals of apples and makes
a profit of about $9,000 a year. Jacobs Farm/Del Cabo leases 65 acres for $38,000 a year.
Internships: Formal internships are offered every quarter during the year, but summer is the
busiest intern quarter with 10-15 interns.
Cal Poly Field Trips: There are over 500 students that partake in fields trips to SPR every year.
Cal Poly Courses: SPR offers courses in Sustainable Forestry and Environmental Practices,
Sustainable Rangeland Practices, Field Techniques in Wildlife Ecology, and Certifications in
Sustainable Agriculture. SPR also offers a broad spectrum of research projects.
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New projects that are planned at SPR are:
• Lower Scotts Creek enhancement project
• Highway 1 Bridge Replacement. (this work will be done by Cal Trans)
• Highway 1 perimeter fencing to contain the cattle on the ranch
• Bunkhouse expansion
Phase 1 and 2 of the work on the facilities at SPR are complete and Phase 3 is in progress
C.
Quarterly Financial Report, March 31, 2013
Wendy reported on the following year-to-date financial highlights.
CPC’s overall financial position is good and the net to reserves for the first three quarters totaled
$6.1 million. Total net assets at March 31 are $80.9 million. Campus Dining’s net to reserves
outperformed its budget and the University Store had a positive year-to-date reserves of
$163,000 but was under budget by $400,000. Core businesses overall contributed $4.6 million
to the bottom line. Capital projects that have been completed year-to-date are:
• Fire alarm upgrades to CPC Administration Building and the CPC Warehouse
• Remodel of VG
• A new Starbucks location was added inside of the Campus Market
CPC’s total assets year-to-date increased $10.2 million from the balance at June 30, 2012. This
increase is due to cash inflow from Campus Dining and other operations, an increase in
investments as a result of favorable investment returns, a partial offset of $4.1 million increase
in liabilities, increase in deferred income relating to student meal plan contracts, and a $1
million increase in APBO liability. CPC anticipates a decrease in both cash and deferred income
liabilities by June 30, 2013.
Total assets of just over $137 million at March 31 are $9 million over prior year March 31
balance of $128 million. Liabilities are in line with prior year and $1 million over the same time
prior year. Assets and liabilities decreased from prior quarter as student meal plans are used.
Net assets have increased steadily year-to-date and ended the quarter $8 million over the same
period prior year.
Core Businesses year-to-date revenues are slightly under budget due to a decrease in commercial
services sales. University store sales are down from budget by 11% and are partially offset by
an 8% decrease in expenses. Campus Dining sales are down 6% from budget. The decreases in
revenues are partially offset by favorable market gains and investment income in the General
Investment Fund. Core-Businesses overall ended the quarter with a net to reserves of $4.6
million.
D.
Quarterly Investment Report, March 31, 2013
Ron Weaver reported on the March 31, Quarterly Investment Report.
Endowment assets had a return of 12.9% and slightly outperformed its benchmark of 12.6%.
Grant and Annuity is at $1.9 million and underperformed its benchmark. In January, funds were
delivered to the Cal Poly Foundation to establish an $8,300 CAFES scholarship endowment, and
another $5,000 was deposited to fund a University discretionary fund.
General fund money market and Certificate of Deposits had a market value of $5.7 million and
had a return of .36%. PIMCO short-term had a return of 1.9% and outperformed its benchmark
of .1% and is valued at $3.6 million. PIMCO low-duration is at $15.3 million and had a return of
3.2% outperforming its benchmark of .4%.
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The General Fund long term investment pool also outperformed its benchmark of 12.6% with a
return of 12.9%.
Student Investment Pool had a return of 7.2% and drastically underperformed its benchmark of
17.2%. This is due to the students were not fully invested and they lost out on the market
upswing. The students have also chosen an aggressive benchmark- the S&P 500.
APBO fund supports retiree medical benefits. It is currently at $24.6 million and is
conservatively invested. It had a return of 11% and outperformed its benchmark of 10.2%. CPC
also has three CD’s that are valued at a total of $1.5 million. CPC is keeping these assets there
with the expectation that as they work through the project the CPC Board has given them to
secure these assets, in the near future CPC will be drawing down on the assets instead of adding
to them. The APBO fund is 100% funded for active retires and vested employees but CPC is
not fully funded for current employees who are not vested.
Ron updated the Board on the Steering Committees progress in securing the APBO assets for its
specific intended purpose.
The committee has:
• Requested and received information from services providers
• Sent out RFP’s and received seven responses
• Retained a lawyer in Chicago; Russell Greenblatt
This project will be in three phases:
• Phase I Analysis, Recommendation and Decision (committee is currently in this phase)
• Phase II Implementation
• Phase III Ongoing Operations, Maintenance, and Administration
Russell Greenblatt has been retained for Phase I with the option of continuing with Phase II &
III.
By the end of this month, Russell will have a report for the Steering Committee that takes a look
at three or four options.
V.
Announcements
A. Next Scheduled Board Meeting: May 24, 2013, 8:30AM
VI.
ADJOURNMENT
No further matters appearing, the meeting was adjourned at 10:14 a.m.
Respectfully submitted,
________________________
Ann Roy
RECORDING SECRETARY