Minutes are not final until approved by the Board of Regents at the September 2011 meeting

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1 Minutes are not final until approved by the Board of Regents at the September 2011 meeting BOARD OF REGENTS and its INVESTMENT AND FACILITIES COMMITTEE NEVADA SYSTEM OF HIGHER EDUCATION System Administration Las Vegas Conference Room, Suite C W. Flamingo Rd., Las Vegas Thursday, July 21, 2011 and Video or Telephone Conference Connection to: System Administration - Reno 2601 Enterprise Road, Reno Great Basin College, Elko Berg Hall Conference Room, 1500 College Parkway, Elko Members Present: Other Regents Present: Mr. Michael B. Wixom, Chair Mr. Cedric Crear, Vice Chair Mr. Mark Alden Mr. Ron Knecht Mr. James Dean Leavitt Dr. Jack Lund Schofield Mr. William J. Cobb Dr. Mark W. Doubrava Dr. Jason Geddes Mr. Kevin C. Melcher {via telephone} Others Present: Mr. Bart Patterson, Vice Chancellor, Administrative & Legal Affairs Mr. Mark Stevens, Vice Chancellor, Finance Mr. Scott Wasserman, CEO & Special Counsel to the Board Mr. Hank Stone, System Counsel and Director of Real Estate Planning Ms. Ruby Camposano, Director, Banking & Investments Mr. Vic Redding, NSHE Mr. Carl Diekhans, President, GBC Dr. Marc Johnson, President, UNR Mr. Peter Ross, DRI Ms. Sonja Siebert, GBC Mr. Gerry Bomotti, UNLV Mr. Nolan Lister, UNLV-Rebel Yell Mr. Troy Miller, UNR Mr. Ron Zurek, UNR Ms. Denise Baclawski, UNR-Fire Science Academy Dr. Thomas Schwenk, UNR-UNSOM Mr. Chet Burton, WNC Mr. David Breiner, Cambridge Associates Mr. Paul Takahashi, Las Vegas Sun (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 1 of 12

2 Investment and Facilities Committee Minutes Page 2 Chair Wixom called the meeting to order at 9:00 a.m. with all members present except Regent Crear. 1. Public Comment None 2. Approved-NSHE Operating and Endowment Pools The Committee approved Cambridge Associate s recommendation to terminate NSHE s two money market managers and to liquidate the money market funds in the operating and endowment pools that relate to investments in Europe, specifically the Wells Fargo Heritage Money Market and the Commonfund J.P. Morgan Prime Money Market. The Committee approved authorizing NSHE staff and Cambridge Associates to reinvest the liquidated funds in lower risk, Treasury only, money market funds that are the Wells Fargo 100% Treasury Market fund and the J.P. Morgan U.S. Treasury Plus Market fund (Ref. IF-2 on file in the Board office). Chair Wixom said that because of NSHE s exposure to default risks and obligations of European banks, Cambridge Associates has recommended liquidating funds in two money market accounts and reinvesting the money in lower risk treasury-only money market funds. Chair Wixom highlighted that the tradeoffs contained in the recommendation are: 1) a ten basis point yield giveup which is approximately $100,000 a year, with a modest opportunity risk, and 2) in light of the political battles over the U.S. debt ceiling it has to be acknowledged that a technical default leads to short-term volatility in U.S. Treasury markets. Chair Wixom asked Cambridge Associates, given the developments of the last 20 days regarding additional question marks about the U.S. debt ceiling and additional volatility in U.S. markets, what is the opinion and advice for the Committee that day. Regent Crear joined the meeting. Mr. David Breiner, Cambridge Associates, explained that this issue came down to a judgment call and it remains the same. The situation in Europe is more fraught with risk and complexity than the U.S. debt ceiling discussion as it pertains to Treasuries. While the discussion in the U.S. is bogged down, things have gotten relatively worse in Europe at the same time. Rates in the Italian market shot up above of 6%, suggesting that this risk of Greece is spreading into other big debt markets. Mr. Breiner reported that Cambridge Associates spends time with managers that are immersed in these markets and the experts feel confident about the U.S. solving the debt ceiling problem maybe not by August 2, If the deal is not robust enough to placate the rating agencies there could still be a downgrade from S&P to AA. Regent Knecht stated that the cost of capital relies on the Treasury bond riskless rate. He agreed with Mr. Breiner that things in Europe have gotten worse and there is uncertainty in the Treasury bond market in the U.S. Regent Knecht asked (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 2 of 12

3 Investment and Facilities Committee Minutes Page 3 2. Approved-NSHE Operating and Endowment Pools (continued) why we would limit ourselves to Treasury bonds. He asked about looking at U.S. commercial paper, state and local government based note funds, and other alternate options. Mr. Breiner clarified that the money market funds recommended are limited to Treasury bills and notes, not bond funds. What Cambridge Associates did was work with the existing relationships, like Commonfund and Wells Fargo that are in place with the System s approved list of money market funds. Mr. Breiner did not conduct a broad search; he worked within the relationships that were in place. Regent Leavitt moved approval to follow Cambridge Associate s recommendation that NSHE s money market funds be liquidated as they exist within the operating and endowment pools as it relates to investments in Europe. Regent Knecht seconded. Chair Wixom clarified that the motion is to remove NSHE s exposure from European banks. There is approximately $126 million in the operating fund and approximately $1 million in the endowment fund. The motion is to move the funds and then there will be a separate motion of what to do with the funds after they are moved. Ms. Ruby Camposano, Director of Banking & Investments, recommended a friendly amendment to the motion to specify termination of the two managers and liquidation of the funds of the Wells Fargo Heritage Money Market and the Commonfund J.P. Morgan Prime Money Market. Regent Leavitt accepted the friendly amendment. Regent Knecht seconded. Regent Alden asked about this being moved into cash. Chair Wixom explained that the issue was bifurcated. The first was to liquidate. The second motion will decide where the funds are to be moved. Upon a roll call vote Regents Wixom, Crear, Alden, Knecht, Leavitt and Schofield voted yes. Motion passed unanimously. Regent Leavitt would like to suggest reinvesting the funds into lower-risk Treasury money market funds and asked if it was possible to recommend anything else as determined by the construction of the agenda item. Mr. Patterson, Vice Chancellor, Administrative & Legal Affairs, thought the agenda item was first referencing a recommendation as to where the funds might go, but in the second (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 3 of 12

4 Investment and Facilities Committee Minutes Page 4 2. Approved-NSHE Operating and Endowment Pools (continued) paragraph it states that the Committee will make a decision of where to reinvest these funds. He felt the agenda item was broad enough for the Committee to choose some other fund if there is adequate information to make that decision. Mr. Breiner indicated that treasury is the safest place to go, notwithstanding the issues discussed about the debt ceiling. Mr. Breiner is not aware of any safer alternatives. There are many higher yielding options, but he was not prepared, at the time of the meeting, to offer any suggestions. With respect to the cash, this is not ideally the place to reach for yield. This money needs to be there when the world gets really ugly, and it could. Mr. Breiner s advice is to take it as safe as possible and take investment risk elsewhere in the portfolio as needed. Chair Wixom agreed with the suggestion to investigate alternatives and requested that be performed. He was concerned about making a move into those types of alternatives that day without the information. There have been times that the Committee has had to reverse some decisions it made. Chair Wixom suggested moving into notes and bills today and asked about incurring penalties if the mix was changed at the September 2011 meeting. Mr. Breiner will check but was not aware of any. Regent Leavitt moved approval to authorize Cambridge Associates to reinvest the liquidated funds from the previous motion (which included both the operating and endowment funds) in lower risk, Treasury only, money market funds, that is the Wells Fargo 100% Treasury Market fund and the J.P. Morgan U.S. Treasury Plus Market fund. Regent Schofield seconded. Regent Knecht asked about the in and out costs of going to U.S. Treasuries today because he is not feeling sanguine about the next two months when the Committee next meets to take action to get out of them. Mr. Breiner said with both Wells Fargo and Commonfund there will be no transactions costs associated with making these changes. Chair Wixom thought the notes and bills were instruments with a 90-day maturity. Mr. Breiner clarified that it is a 52-day average weighted maturity. Chair Wixom noted that this would make the risk much lower. Chair Wixom indicated that there was a motion to transfer the funds into the Wells Fargo 100% Treasury Market fund and the J.P. Morgan U.S. Treasury Market fund. He noted the assumption that the allocations would be what is held in the Heritage funds now. (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 4 of 12

5 Investment and Facilities Committee Minutes Page 5 2. Approved-NSHE Operating and Endowment Pools (continued) Regent Crear asked if there was some type of leeway for the System to respond in case something happens within the next few days. Chair Wixom said the issue is do we need to give flexibility to Vice Chancellor Stevens and Chancellor Klaich with respect to these funds over the next few days. Mr. Breiner agreed with that kind of flexibility and delegating those types of powers to staff. Regent Leavitt asked about the Chancellor s authority to respond to volatility and urgency. Chair Wixom said when this issue recently arose, he felt that he did not have authority, as Chair of the Committee, to take this type of action without the Committee s action. He does not believe that anyone in the System has the authority to act without Committee action. Chair Wixom pondered whether the Committee should delegate authority to Chancellor Klaich and/or Vice Chancellor Stevens acting in consultation with the Chair of this Committee and the Chair of the Board to wait until there is some sort of ceiling debt deal before the move is made. Chair Wixom felt it probably does not make sense because he was not sure what authority needs to be delegated at this point in time. Regent Leavitt reiterated that his inquiry was whether authority could be delegated. Mr. Patterson felt it would depend on what discretion is delegated. He would be uncomfortable with an open-ended delegation of authority from the Committee. If the Committee is just giving authority to the Chancellor under specific criteria as to whether to reallocate these funds to a particular investment along with the criteria for making that decision, Mr. Patterson felt that was legal and he was comfortable with that sort of a delegation. Regent Knecht was supportive of Regent Leavitt s motion because it bifurcated the issue. He thought that, as a fall-back if nothing else, having liquidated the investment in the European bank exposure funds, that the money could be left in cash for up to six weeks if it was necessary. He felt that was an option. Chair Wixom noted that was not part of the motion. Mr. Breiner said to do that it would required going back to Commonfund, which is housing the prime money market fund that NSHE is getting out of that is where the Treasury only investment would be. Commonfund has some sort of a cash-like option within their umbrella, but the details need to be looked at. Mr. Breiner stated that a checking account is considered cash. Chair Wixom said that would be a concern. Cash can mean many different things and can have risks. Regent Cobb would be cautious to delegate that type of authority to two individuals, noting that one of those individuals was on leave and was not participating in the meeting. He suggested the Committee make the decision. Regent Alden felt the point was being missed. There is no problem with the first motion. Whether the second motion passes or not, there is not another meeting until September He felt the second motion should be bifurcated; the operating fund should go to cash and stay there, the endowment fund is another (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 5 of 12

6 Investment and Facilities Committee Minutes Page 6 2. Approved-NSHE Operating and Endowment Pools (continued) question. There is a lot of volatility between now and September He noted that if authority is granted in relation to the endowment fund it has to be crafted so that it is not micro-managed. Regent Leavitt stated that there was approximately $1 million in the endowment fund. There are no transaction costs to reinvest. Cash will not be earning anything. Mr. Breiner said the money market fund is earning nothing. Regent Leavitt asked if nothing is earned, what would be the advantage over the cash account. Chair Wixom asked for a clarification of cash. Mr. Breiner was not sure what the cash account was a checking account with Wells Fargo or another cash vehicle he was not sure. It makes for a difficult comparison. Again, these Treasury only money market funds are the safest thing Cambridge Associates was able to find within the given set of funds. Other cash options can be weighed in on. Chair Wixom indicated that sometimes Treasury market funds are defined as cash or another version of cash. In 2008 the System thought it was in a cash fund which ended up frozen for 90 days. One reason to support the motion is to understand what the market is and the flexibility of getting in and out. He is not aware of the other options. Chair Wixom would like a better definition of what the cash options are, of moving into corporate bonds and municipal bonds. He felt that information was not available that day. Regent Leavitt asked for clarification of how this investment is safer than the cash accounts referenced by Regent Knecht. Mr. Breiner responded that is because it is backed by the full faith and credit of the U.S. Government. Regent Knecht felt it was not just the possibility of loss that is of concern; it is also the recurrence of 2008 where the investment was frozen. The fund that is connected directly to bills and notes can run into trouble. Mr. Breiner said it would be irresponsible to rule anything out. If these money market funds had an issue, he was not sure what would not have an issue. He noted that the cash has been spread across three different sponsoring banks as another safety measure J.P. Morgan, Wells Fargo and State Street. Chair Wixom clarified that the 2008 situation was not a Treasury market account. It was not a notes and bills account. Regent Knecht clarified that the point was there was an account frozen as a bad outcome, as well as losing money. We could be headed for a similar financial seize-up, only this time it will be focused on Treasury notes and bills and that is the reason to look for some other cash equivalent that is not based on Treasury notes and bills. The problem is that these are very abnormal times particularly relating to Treasury notes, bills and bonds. (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 6 of 12

7 Investment and Facilities Committee Minutes Page 7 2. Approved-NSHE Operating and Endowment Pools (continued) Chair Wixom asked for the motion to be restated: Regent Leavitt moved approval to authorize Cambridge Associates to reinvest the liquidated funds from the previous motion (which included both the operating and endowment funds) in lower risk, Treasury only, money market funds, that is the Wells Fargo 100% Treasury Market fund and the J.P. Morgan U.S. Treasury Plus Market fund. Ms. Camposano asked to revise the motion to include the reinvestment authorization from NSHE staff and Cambridge Associates. Regents Leavitt and Schofield accepted the friendly amendment. Regent Alden asked the amount of endowment fund dollars that were being reinvested. Chair Wixom responded that as of July 19, 2011, it was $1,091, The amount in the operating fund as of July 19, 2011, was $126,499, Regent Alden did not have a problem with the endowment funds going into the Treasury. He felt the operating pool should stay in cash. Upon a roll call vote the motion passed. Regents Crear, Leavitt, Schofield and Wixom voted yes. Regents Alden and Knecht voted no. Chair Wixom asked, with only four meetings per year, how to get timely information about these types of fluctuations. It could be that as it happened Cambridge Associates alerted Vice Chancellor Stevens, who in turn alerted Chair Wixom, was an appropriate procedure. Regent Knecht shared the concern. He felt that it was probably the case that everything worked as it should. It is not just timely information, but the scope of information. He would like to know more about transparency and visibility on various investments within the operating and endowment funds. What level of detail is there on these funds and can more be provided. Mr. Breiner said the answer is that transparency is very good, as is the report presented at every meeting. There is a more detailed report, 200 to 300 pages that can be distributed. Regent Knecht would like to receive that report. Chair Wixom requested that information in an format be distributed to all Regents. (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 7 of 12

8 Investment and Facilities Committee Minutes Page 8 3. Information Only-Fire Science Academy Progress Report UNR Dr. Marc Johnson, President, UNR, presented a progress report on the Fire Science Academy (Ref. IF-3 on file in the Board office). President Johnson said the overall context was to have major decisions accomplished for the Fire Science Academy by June 2011 and present a progress report. He requested the continued support from the Committee for the next few months in order to finalize some transitions. President Johnson reported that the Fire Science Academy operation earned $3 million, which is approximately $350,000 more than was projected. For the third year, there has been a better than break even outcome on an operating basis, not taking into account debt service, operations or maintenance. Consequently, $300,000 has gone to the operation deficit. Presently, it is not costing anything or adding to the deficit by continuing the operation of the Fire Science Academy. To stop the operation without these long-term transactions occurring would result in substantial liability to shut the operation down and clean it up. In the meantime there is a request of forbearance to continue operation while finding a solution. President Johnson stated that the sale of the Fire Science Academy property with a lease-back provision has been obtained, which is necessary for continuing the teaching operation. The sale is awaiting the Federal match money of approximately $2 million. The language in the Federal authorization for the $2 million is unclear and until some questions are answered, the National Guard is uncomfortable releasing any money. The $8 million allocated by the state to the National Guard to buy the property is still in place and when the $2 million is added, there will be $10 million for the sale of the property to the National Guard. The Board already approved $4 million from previous land sales so adding that into the $10 million will reduce the capital debt from $24 million to $10 million. President Johnson said there are attempts to find long-term financing, either public or private, for the accumulated operating debt. It is very clear that the Fire Science Academy operation is important as a national asset due to the specific types of training it offers. Continuing the Fire Science Academy is important to the economy of the northeast territory of Nevada. A group of stakeholders from Elko and Carlin voted to form a smaller group of stakeholders to work on a plan, through Senator Heller, to join a consortium of organizations that provide safety training. Senator Heller and his staff are aware of the issues. The next step is to submit a joint public-private plan to Senator Heller and his staff for the Fire Science Academy to join and become part of the consortium. Senator Reid helped as much as possible with earmarked funds. Regent Geddes felt that Ms. Denise Baclawski, Executive Director of the Fire Science Academy, did a great job by keeping the money on the positive side. He expressed frustration with the oil companies because they need to step up and support this. President Johnson said stakeholders are nearing the end of a three (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 8 of 12

9 Investment and Facilities Committee Minutes Page 9 3. Information Only-Fire Science Academy Progress Report UNR (continued) year financial stability plan. Some oil companies did participate and they are being asked to join the financial solution. Chair Wixom thought that the additional money allowed some flexibility to solve some of the problems. He is concerned that the profit of $300,000 does not reflect maintenance and deferred maintenance and asked what those numbers might be. President Johnson said some of the deferred maintenance has been taken care of. Ms. Baclawski said that five years ago a capital replacement assessment plan identified what had to be done immediately for safety, health and asset protection, along with a listing of items that should be done over time. The total for everything was $1.5 million. Approximately $300,000 to $500,000 of that work was done immediately. Since then $1 million has accumulated in the financial sustainability plan, of which approximately $340,000 was spent for deferred maintenance projects. The largest project was a modification, completed over a year ago, which included the deferred maintenance that was required. Chair Wixom asked for a dollar figure on the deferred maintenance liability as of now. Ms. Baclawski responded that in terms of what absolutely has to done it is under $500,000. Over the next 10 years there will be six prop pads that will have to be replaced at an estimated cost of $200,000 to $300,000 each. Chair Wixom stated that ongoing operating revenue and net income is obviously positive, but those numbers can lull the Committee into a false sense of complacency in terms of the overall liabilities. He asked for exactly what the present needs are in terms of deferred maintenance not in generalities, but specific dollars. He is looking for an exact liability, the cost for deferred maintenance, a precise delineation of what those costs are, what needs to happen in the immediate future, which is for the next 12 months, and what the needs are beyond that. Chair Wixom felt that it may be appropriate to take some of the $300,000 and apply it to the deferred maintenance needs. He requested that this information be presented at the next meeting. 4. Information Only-Purchase of a Residence in Clark County UNR School of Medicine The Committee discussed the progress of the purchase of a residence in Clark County by the University of Nevada School of Medicine for use by the Vice President for Health Sciences and Dean of the School of Medicine (Ref. IF-4 on file in the Board office). President Johnson explained that given the market situation and increased emphasis placed on the School of Medicine s presence in Las Vegas, UNR feels that it is important for the Dean of Medicine to have a residence there. The Dean has chosen to have his personal residence in Reno. It is not a new precedence to rent a facility for the Dean of Medicine in Las Vegas, but given the present (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 9 of 12

10 Investment and Facilities Committee Minutes Page Information Only-Purchase of a Residence in Clark County UNR School of Medicine (continued) market conditions it may be a good investment to have a permanent residence so the Dean can become a real member of the community. President Johnson said the request is to have the latitude to continue to search for property and to have the capability of putting in a bid not to exceed $400,000. Regent Alden stated that there is a lot of house available for $400,000. He suggested a gated community and to be located in close proximity to the School of Medicine. Regent Leavitt expressed concern with limiting the amount to $400,000 and felt it should be capped at $750,000. This residence will be used as a way to bolster substantial private giving. He thought this would be a vehicle to help the Dean succeed to raise money and facilitate large gatherings. Regent Leavitt thought this will give the Dean the tools to succeed. Regent Schofield stated support for this move and believed it could be accomplished within the $400,000 range. Regent Cobb agreed that a decent property should help with fundraising efforts. He asked how the sum of $400,000 was derived. President Johnson said that the real estate director for UNR researched properties in Las Vegas and made that determination. Regent Knecht said $400,000 is a comfortable number because the residence in this particular case does not require a lot of space for family living. It will be more of an executive home. However, he felt it was not necessary to purchase a residence in Las Vegas for the Dean. Chair Wixom is concerned about raising this to $750,000 because there is a danger of sending the wrong message. He supports the purchase of a residence, but does not support anything beyond $400,000. He suggested setting the ceiling at $400,000 and if it appears to go beyond that it can be discussed at the September 2011 meeting. Regent Geddes was not sure if payment would come from capital expenditures or the real estate holdings. President Johnson said this would be paid for from property reserves or capital, either from School of Medicine or the University. Regent Geddes said there is a chance to recoup these costs and the residence will be an asset. Regent Doubrava supports the purchase of a residence in Las Vegas. He was comfortable with the $400,000 limit. (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 10 of 12

11 Investment and Facilities Committee Minutes Page Information Only-Purchase of a Residence in Clark County UNR School of Medicine (continued) Mr. Patterson, Vice Chancellor, Administrative & Legal Affairs, stated that the recommendation is for the purchase price not to exceed $400,000. If the Committee were not to put that limitation on, or put a different limitation, it would be appropriate under the agenda item. He wanted to be sure the Committee is clear that while it has been given authority to make final decisions on investment issues, the Committee does not have authority to make a final decision absent a specific delegation from the Board on an issue over the purchase of property. Approval of this motion grants authority to offer a bid on the property, but it will still be subject to final approval from the full Board. Regent Crear asked why the house is being purchased rather than the Dean having a monthly stipend like the presidents do. President Johnson said at this time the real estate market is a good investment for the long-term. Another reason is that the Dean would have to personally own two residences. Regent Crear asked about ownership of the home. Chair Wixom said it would be the property of the School of Medicine and that would be a permanent residence for the Dean, no matter who the dean is. Regent Leavitt said that when looking at the development and expansion of the Health Sciences System in Nevada, it is important to have an appropriate home. It has to be suitable for fundraising and similar to what a successful physician would live in like the Scotch 80 s, Bel Air, or the Rancho area. Mr. Troy Miller, Real Estate Director, UNR, said that the process of looking for real estate in Las Vegas is in the very early stages. Samples of possible areas of interest have been given to the Dean. Chair Wixom felt the consensus was to find a suitable residence. The Committee cannot give approval for the final purchase, but can give approval for the range. Chair Wixom suggested not taking any particular action. Let the Dean and Mr. Miller look, and after viewing some properties, return to the Committee in September 2011 with more specifics. President Johnson asked that if the right property was found, could an offer be made subject to Board approval. Chair Wixom said that would be appropriate. Regent Leavitt recommended finding what is designed well for entertaining. He does not want the cost to be pre-determined. 5. New Business Regent Alden indicated that he would like to consider amending the By-Laws to provide latitude to make investment decisions to the Chancellor, the Chair of this Committee, the Chair of the Board and/or Vice Chancellor Stevens if there is an emergency. Chair Wixom does not want that type of authority without the proper information to make a decision. The Committee provides discussion and there are benefits from the decision of the entire Committee. (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 11 of 12

12 Investment and Facilities Committee Minutes Page Public Comment Regent Cobb said that on July 20, 2011, with regret, he submitted his resignation from the Board effective on September 2, 2011, as he will be sworn in as a Magistrate Judge on September 3, He will meet with the Governor s staff to discuss the qualifications of a new candidate. Chair Wixom enjoyed working and serving with Regent Cobb. He offered congratulations and wished him well. He noted that Regent Cobb leaves with respect and admiration. Regent Leavitt congratulated Regent Cobb and thanked him for discharging his duties faithfully as a Regent and noted that he was an invaluable member of the Board. He will be missed. Regent Schofield thanked Regent Cobb for serving on the Board, noting that he was a great asset and friend of higher education. Regent Cobb thanked everyone for their kind comments. He said that serving on the Board was an honor. The meeting adjourned at 10:46 a.m. Prepared by: Submitted for approval by: Nancy Stone Administrative Assistant IV Scott G. Wasserman Chief Executive Officer & Special Counsel to the Board of Regents (INVESTMENT AND FACILITIES COMMITTEE 09/08/11) Ref. IF-2a(2), Page 12 of 12