Unofficial Minutes USF Board of Trustees Tuesday, October 13, 2015 Marshall Student Center Room 2709

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1 Unofficial Minutes USF Board of Trustees Tuesday, October 13, 2015 Marshall Student Center Room 2709 Chair Harold Mullis convened the special meeting of the University Of South Florida Board Of Trustees in the USF Marshall Student Center at 1:00 p.m. Chair Mullis welcomed everyone to the special meeting of the USF Board of Trustees. President Judy Genshaft called the roll with the following Trustees present: Trustee Jozef Gherman Trustee Stephanie Goforth Trustee Scott Hopes Trustee Brian Lamb Trustee Stan Levy Trustee Steve Mitchell Trustee Hal Mullis Trustee John Ramil Trustee Debbie Sembler out of town Trustee Byron Shinn Trustee Greg Teague Trustee Nancy Watkins Trustee Jordan Zimmerman II. New Business Consent Agenda Chair Mullis asked for a motion to approve the consent agenda items FL It was seconded and items FL 101 FL 103 were approved. FL 101 Approval of the USF Sarasota-Manatee Property Disposition (Consent Agenda) FL 102 Approval of the FIO Annual Report (Consent Agenda) FL 103 Approval of Academic Infrastructure Support Organization Renewal of Host Institution, Memorandum of Understanding (MOU), Strategic Plan and FIO 5-Yr Programmatic Evaluation/Review (Consent Agenda) Chair Mullis added that in order to avoid conflict of interest issues Trustee Hopes disclosed his status as a student in the DBA program and will abstain from voting on item FL 104. He asked for a motion to approve the consent agenda item FL 104. It was seconded and FL 104 was approved.

2 FL 104 Approval of Amendment to DBA Market Rate Conversion Proposal (Consent Agenda) III. New Business Action Items Chair Mullis called on CFO Nick Trivunovich to present FL 105 Approval of the parameters for the USF Tampa On-campus Grocery Store Project and the Parameters for the Ground Sublease Agreement. CFO Trivunovich stated that the item was first presented at the Finance and Audit Workgroup where many of the Trustees were present. Given the importance of the item, he provided a brief overview with some additional information. Based on student surveys this project was the number one request related to amenities and is a significant tie to the P3 housing project. The university engaged in an open public procurement process for a grocery store on campus. This process followed the guidelines that the university uses when it does a public procurement, based on USF regulation and BOG regulation The General Counsel Office provided advice during the process in order to ensure compliance with these guidelines. In this process the university was looking for a grocery store chain with an outstanding reputation and significant financial strength. In order to comply with the BOG P3 Guidelines regarding financial viability of partners, priority was given to those grocery store chains with at least $25B in annual revenues. This includes stores such as Walmart, Kroger, Publix, in combination with Giant Foods and Stop and Shop. However this preference didn t preclude any other chains from participating. In addition the university directly contacted grocery chains that met the reputation parameters that didn t have at least $25 billion in revenue. Those included Whole Foods, Trader Joe s and Winn Dixie. The reason for the emphasis in the financial strength is two folds: first, the financial strength is important in order to meet the P3 requirements that the BOG has in their guidelines; second, as the Board has shared numerous times the critical component in a P3 is the partner. The university wanted a partner over the life of the lease. Once the process was completed the Intent to Award was issued for Publix Supermarkets, Inc. on September 21, Publix is not only one of the premier grocery stores chains in the country but one of the premier companies of any type. Ground Lease Terms include: 20-year term with six 5-year renewals (50-year total term); ground rent $130,000 annually; up to 28,800 square foot store/approximately 3 acre parcel. CFO Trivunovich emphasized that while receiving a fair revenue return for the lease is important, the primary focus for this project is student success. This project will provide alternate food service opportunities and reduce the need for students to leave campus for grocery items. In

3 addition, Publix agrees to conduct at least two job fairs per calendar year on campus for available employment/internship opportunities. In addition Publix will employ a large number of students on a part time basis on campus. Trustee Mitchell thanked CFO Trivunovich for the presentation and stated that Publix is a great selection. Trustee Gherman stated that students are extremely excited for this project. Trustee Hopes fully supports the grocery store on campus but remains concerned on how the RFP was structured, with only one respondent. The conditions in the RFP clearly state: a priority has been established of a grocery chain with at least $25 billion of annual revenue; and the university has an interest in promoting regional economic development in the use of local and Florida vendors. Trustee Hopes feels that a company may conclude from these conditions that a vendor has already been chosen. If a company has limited resources they will not submit a proposal. In addition Trustee Hopes asked for a comparison with an existing grocery store or a Publix and was informed that such comparison is not available. Trustee Hopes provided information on a Publix grocery store across the parking lot from the dormitories at the University of Alabama. It s free standing and not a high performer. Trustee Hopes also mentioned a grocery store in Tallahassee that is proximate to fraternity row, that s a comparison with revenue and lease rate. There is another store one in Feather Sound, almost the identical size. Trustee Hopes also made comments regarding whether Publix can put in the agreement to give priority to hiring USF students. Trustee Hopes does not believe the university is adequately prepared to go to the Board of Governors to say we have exhausted reasonable efforts to determine that this particular proposal is going to deliver the best value to our student with price as well as the best value for the property. Trustee Hopes would like to have compelling evidence that this is the best value deal. Chair Mullis acknowledged Trustee Hopes concerns. Trustee Ramil added that the companies mentioned by CFO Trivunovich are used to competing with Publix every day and they chose not to submit a proposal. The management team has presented the Board with a project with a high quality partner which aligns with the university s mission and vision for student success. Trustee Ramil made a motion to approve FL 105. Trustee Mitchell seconded the motion.

4 Trustee Mitchell added that thresholds in RFP are not unusual because owners of the company want to ensure the quality of respondents. The motion passed by majority. Trustee Hopes voted no. Chair Mullis called on Provost Wilcox to present FL 106 Authorize participation in the upcoming FCC Incentive Auction. This item was also presented to the Finance and Audit workgroup on Tuesday, October 6, Provost Wilcox provided an overview of the top tier research universities that own television stations. He also presented on how WUSF TV aligns with the USF s strategic priorities. Trustee Mitchell asked consultant Mr. Tim Pecaro to provide information on where WUSF fits in the overall program. Mr. Tim Pecaro stated that the greatest needs for spectrum sales is in the largest markets, in most congested areas. The northeast corridor in particular will be one of the major focus because there are so many stations operating in a small geographic area. To have spectrum open in New York, they will have to clear stations in Vermont, Rhode Island, in Hartford, all the way up to Maine. They need to have interference free spectrum. There isn t a great need in Florida. It is not as crowded but it is crowded. Orlando has the greatest impact because it is at the center of the state. Their estimates for the Tampa market is between zero and six stations so there is the possibility that they might need none. They have done about 100 simulations but the number of potential outcomes is much greater than that. They cannot identify how many stations they will need until they know who will participate. The major networks are not likely to participate but they may participate in channel sharing but three of the four networks in this market are in a less desirable frequency. WUSF is in a desirable frequency and has among the highest interference profiles with other stations in this market therefore with all everything being equal WUSF is an attractive option. If the Board chooses to not participate the only option is to be a channel sharing partner after the auction is over. Trustee Stan Levy fully supports the item and doesn t see a compelling reason for the university to have a TV station at this time. Chair Mullis asked whether there is a competitive disadvantage in the auction process if we maintain full possibilities and check all the boxes. Mr. Pecaro stated that at some point they will ask for a preference.

5 Trustees had questions on whether the options should be prioritized. After a discussion the Board agreed that it will be better to keep all the options and give the authority to Trustee Watkins to choose an option. All the options will be on the table but it will not be discussed with the Board because of the Quiet Period. Trustee Ramil clarified that after today s meeting the Trustees can no longer discuss this item. Once the quit period begins university staff will communicate only with Trustee Watkins. Provost Wilcox added that not only will communication disqualify the university but there could be significant penalties. Chair Mullis asked for a motion. Trustee Watkins made the same motion as the Finance and Audit Workgroup: USF will participate in the FCC Incentive Auction, reserving the right to post auction channel sharing. Trustee Watkins shall represent the BOT in all aspects during the FCC mandated quiet period. Trustee Ramil stated that Trustee Watkins should have all the necessary information, support and experts to make a decision. Trustee Watkins added that the university has already hired consultants and many other independent experts and counsel. The team will continue to have the appropriate experts throughout the process. Trustee Ramil seconded the motion. The motion passed unanimously. Chair Mullis thanked everyone for their participation. Having no further business to discuss the Chair ended the special meeting of the Board of Trustees. Harold W. Mullis, Chair Judy Genshaft, Corporate Secretary

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