Call to Order: A quorum being present, a meeting of the Board of Directors of the Kansas Bioscience Authority was called to order by Chairwoman Sandra Lawrence at the Capitol Plaza Hotel, Topeka, Kansas, at 8:05 a.m. Telephone hook-up was established at the KBA offices in Olathe to allow public participation in the meeting from that location. Other Directors present were Dr. Ray Smilor, Dr. David Franz, Ed McKechnie, Governor John Carlin, Bill Sanford, Bill Thornton, Reggie Robinson, and Angela Kreps. Representative Melvin Neufeld, Board nominee, was also in attendance. Others attending the meeting from KBA staff were Tom Thornton, Jan Katterhenry, Chad Bettes, and Marsh LoScalzo. Jeff Ellis, legal counsel from Lathrop & Gage, was also in attendance, as were several members of the public.
Report on Reception: The Board briefly discussed the activities of the reception at the Governor's Mansion the previous evening. It was agreed that important conversations with key stakeholders occurred.
Motion to Recess Into Executive Session: Chairwoman Lawrence moved that the Board recess into executive session pursuant to K.S.A. 74-99b07 to discuss marketing and operational strategies which, in the opinion of the Board, would be harmful to the competitive position of the Authority if disclosed. The executive session will begin at 8:10 a.m. and last for 90 minutes. The meeting will reconvene in the Emerald IV Ballroom of the Capitol Plaza Hotel and by phone conference at 9:40 a.m. Included in the meeting will be all members of the Board, Tom Thornton, Jan Katterhenry, Chad Bettes, and Jeff Ellis, legal counsel. The motion was seconded by Dr. Smilor and unanimously approved.
Return to Open Session: Upon motion by Governor Carlin, seconded by Mr. Sanford, and unanimously approved, the Board reconvened in open session at 9:40 a.m. No action was taken.
Motion to Recess Into Executive Session: Mr. Sanford moved that the Board again recess into executive session to continue the discussion undertaken during the initial executive session and under the Authority of the previous executive session to discuss marketing and operational strategies which, in the opinion of the Board, would be harmful to the competitive position of the Authority if disclosed. The executive session will begin at 10:00 a.m. and continue for 90 minutes. The meeting will reconvene in the Emerald IV Ballroom of the Capitol Plaza Hotel and by phone conference at 11:30 a.m. The motion was seconded by Governor Carlin and unanimously approved.
Return to Open Session: Upon motion by Dr. Smilor, seconded by Dr. Franz, and unanimously approved, the Board reconvened in open session at 11:30 a.m. No action was taken.
Motion to Recess Into Executive Session: Governor Carlin moved that the Board again recess into executive session to continue the discussion undertaken during the initial and extended executive sessions and under the Authority of the previous executive sessions to discuss marketing and operational strategies which, in the opinion of the Board, would be harmful to the competitive position of the Authority if disclosed. The executive session will begin at 11:31 a.m. and continue for 30 minutes. The meeting will reconvene in the Emerald IV Ballroom of the Capitol Plaza Hotel and by phone conference at 12:01 p.m. The motion was seconded by Ms. Kreps and unanimously approved.
Return to Open Session: Upon motion by Dr. Smilor, seconded by Governor Carlin, and unanimously approved, the Board reconvened in open session at 12:01 p.m. Chairwoman Lawrence noted that no action was taken and that the meetings over the past two days related to discussion of the Authority's strategic plan and decisions to be considered by the Authority Board at its annual meeting on July 20, 2009. She noted that the strategic planning process was very productive and that many ideas for future activities of the Authority were discussed.
Approval of Minutes: Chairwoman Lawrence asked for a motion to approve the minutes of the Executive Committee meeting of May 5, 2009, and the Board meetings of May 18 and May 19, 2009, held in Atlanta, Georgia. Upon motion by Dr. Smilor and second by Governor Carlin, the minutes were approved as presented.
President's Report: Mr. Thornton referred the Board to Tab 4 of the previously distributed Board booklet containing a summary of the President's Report for May 2009. He highlighted that the Centers of Innovation were developing and that the staff was reviewing their progress to determine metrics which will allow the Board to determine whether future funding will be granted. He indicated that a fifth Center for Animal Health was under consideration. Mr. Thornton also reported that staff had been working with Midwest Research Institute regarding opportunities which might be available for grants under the programs described in the Recovery Act. The staff is working with the Centers of Innovation to develop grant applications. Four industrial proposals have been developed to date.
Mr. Thornton announced that Brad Kemp will join the KBA staff to lead the Cancer Project effort. He will work with Kansas University to develop a plan to create the infrastructure and help evaluate future investment in the Cancer Project.
Members of the BioVentures team attended meetings at San Diego on drug discovery. He indicated that KansasBIO was involved in the development of the National Drug Development Accelerator (NDDA) project, which offers promise to drug development and research activities in Kansas.
Mr. McKechnie reported on a meeting in southeast Kansas regarding the Tyler Research Park to be developed in conjunction with Pittsburg State University. He stated that the development looked promising and that the meeting went well.
Financial Report: Ms. Katterhenry referred the Board to Tab 5 of the previously distributed Board booklet, which contained the summary of the financial condition of the Authority through May 31, 2009. She indicated that a total of $26,147,729 had been received from the state for the 2009 fiscal year. Funds committed through May totaled $225,118,174, of which $202,224,165 remained to be paid. Approximately $8,000,000 was forecasted at the end of May for payment in June; as of the date of the meeting, $4,000,000 of that $8,000,000 will be delayed until the next fiscal year. The delayed payments are primarily a result of the Centers of Innovation having been approved, but they had not achieved milestones authorizing expenditure by the end of June. In response to a question from Governor Carlin, Ms. Katterhenry noted that the Board should expect higher expenditures in FY 2010 as a result of the delayed payments to the Centers of Innovation.
Ms. Katterhenry referred the Board to the Financial Highlights which indicate that the Authority has received $115,380,627 to date which is equivalent to 20 percent of the total transfers authorized by the state. The Authority has made investment commitments through May 2009 equating to 38.69 percent of its total authorized funds. Approximately 60 percent of the total transfers authorized are available for commitment. That equals $349,395,536 available for commitment. Ms. Katterhenry noted that the net investment return on $1 of milestone payments made equaled $6.29, up from $6.19 as of June 30, 2008.
It was noted that the investment return does not reflect indirect return on KBA investment. Ms. Kreps noted that the Authority may want to compare the Authority's investment return with other states' performance. She expressed her belief that Kansas leverages its investments better than most other states.
Ms. Katterhenry noted that the Economic Growth and Tax Relief Reconciliation Act of 2001 requires important changes in the Authority's retirement plans. The KBA's plan provider, CPI, has provided an updated restatement of the prior 401(a) plan to reflect compliance with the Act. She noted that the submitted plan have been reviewed by Maurice O'Sullivan of Lathrop & Gage. His recommended changes have been incorporated by CPI, the plan administrator. She noted that the revised plan needed approval by the Board. Mr. McKechnie offered the following motion:
Motion:
BE IT RESOLVED, that the Kansas Bioscience Authority 401(a) Plan is hereby amended in its entirety effective as of January 1, 2009, in accordance with the instrument attached and presented to the meeting and made a part of the minutes of this meeting.
RESOLVED FURTHER, that the Chief Financial Officer is hereby authorized and instructed to execute said Trust Agreement for and on behalf of the entity, and to certify these resolutions to Janice Katterhenry as Trustee under said Trust Agreement.
The motion was seconded by Governor Carlin and unanimously approved.
Agenda for Annual Meeting: The proposed agenda for the annual meeting was presented to the Board. It was noted that a slate of officers will be offered at the annual meeting, that the final budget will be presented, and the Annual Operating Plan will be offered for consideration and approval by the Board. Mr. Thornton noted that the AOP will include items gleaned from the discussions during the strategic planning activity that the Board has just concluded. Mr. Thornton indicated that the AOP had been under development for the past two months, and that the input provided by the Board during the strategic planning sessions will enhance the AOP immeasurably.
Adjournment: The Board commended the staff for its work in presenting the strategic planning process. It was recommended that the Board undertake a similar process each year before its annual meeting.
There being no further business to come before the meeting, the meeting was adjourned at 12:31 p.m.