You are currently viewing My comments from the Penn State Board of Trustees Meeting May 3, 2024

My comments from the Penn State Board of Trustees Meeting May 3, 2024

  • Post last modified:May 8, 2024

“Concentrated power is not rendered harmless by the good intentions of those who create it.” Milton Friedman

The Penn State Board of Trustees met Friday, May 3rd 2024 at the Barron Innovation Hub at University Park campus to vote on seven agenda action items. According to the Board secretary, all trustees except for Governor Appointee Terry Pegula were in attendance. 

Prior to Friday’s full Board meeting, on Thursday there were public meetings of the Committee on Audit and Risk and the Committee on Finance, Business and Capital Planning. Read the full published agendas and find links to supporting materials hereWhen the video of the meeting is released I will post a link to it on my website, https://barryfenchak.com. I encourage you to watch it in its entirety.

As a service to alumni and the public who were unable to access the live broadcast of the meeting, the following is an excerpt of the comments I prepared and the vote results for each agenda item.

As background to my remarks regarding Action Item 3;

Penn State Health is the non-profit corporation established by the Penn State Board of Trustees for the purpose of holding and managing components of the health care enterprise controlled by the University, including the Penn State Health Milton S. Hershey Medical Center. Penn State University owns an 80% stake in Penn State Health, which entitles it to appoint 12 of the 15 Board members. Highmark is the minority owner with 20%, which entitles them to appoint 3 Board members.

In April 2024, Penn State Health announced it was suspending its liver transplant program, and that the program could remain inactive for as long as a year. As reported by SpotlightPA, this is the second time in just over two years that Penn State Hershey Med has agreed to halt liver transplants. The suspension comes just months after the Organ Procurement and Transplantation Network (OPTN) reinstated the program to good standing after the last suspension in November 2022. These suspensions are the result of serious administrative violations that included ‘serious violations of OPTN policies or bylaws, or has demonstrated a serious lapse in patient safety or quality of care’, ‘reports of surgical complications and questions about the currency of surgical expertise’, as well as ‘a culture of retaliation for reporting potential problems’.

In addition, Penn State Health announced it was initiating an effort to receive the prestigious National Cancer Institute Center designation. This is certainly a worthy goal, however it is a long and very expensive process which may or may not result in success. Penn State Health already has the Penn State Cancer Institute at Hershey Med, which primarily has a clinical focus. Internal studies reviewing what would be required to achieve this designation have listed concerns about the process, the likelihood of success, and the overall benefit to Penn State.  These studies, to the best of my knowledge, have never been shared with the Penn State Board of Trustees.

Friday, May 3, 2024 public meeting of the full Board.

There were seven voting items on the Friday public meeting agenda.

  • Action Items 1 and 2:

1) RESOLVED, That the Board of Trustees hereby authorizes and approves the sale of approximately 1.21 acres and all improvements located at 1010 North 7th Street, City of Harrisburg, County of Dauphin, Pennsylvania, to Harrisburg School District, in the amount of $3,100,000.

2) RESOLVED, That the Board of Trustees hereby authorizes and approves the sale of two parcels of land (Parcels 27057214000101 and 27057214000102), consisting of approximately 13.716 acres, with all improvements, located at 3002 E 38th Street and Shannon Road, Harborcreek Township, County of Erie, Pennsylvania, to the Slavic Pentecostal Church, in the amount of $320,000.

The first two items were the sales of real estate that were no longer of use to Penn State.

I had no public comments, and voted YES.  Both proposals passed unanimously.

Total Vote: Yea: 35  Nay: 0

  • Action Item 3:

Will the Board of Trustees adopt the following resolution: RESOLVED, That the following individuals be appointed/reappointment to the Board of Directors of Penn State Health by the Board of Trustees of The Pennsylvania State University for a one-year term commencing on July 1, 2024 through June 30, 2025 and until his or her successor is appointed and takes office or until his or her earlier resignation or removal:

Penn State senior administrators: Neeli Bendapudi, President, Penn State University; Sara F Thorndike, VP Finance; Karen E. Kim, ex officio, Dean of the College of Medicine

Former members of the Penn State Board of Trustees: Keith E. Masser, Mark H. Dambly, David M. Kleppinger, Steven B. Wagman, Barry K Robinson

Alumni and benefactors: Timothy P. Brown, Peter M. Carlino, Peter G. Tombros  

This is the appointment of directors to the Board of Directors of Penn State Health.

My comments:

“With respect to the governance of Penn State Health, and appointments to the Penn State Health Board, I have some concerns.

“Several months ago I requested information be provided to the Board on the status of our efforts to potentially earn the NCI Cancer Center designation.  This is a huge undertaking, involving Penn State Health, the College of Medicine, and Penn State University.  I asked for information on where that process stands in regard to:

  • The anticipated timeline to complete

  • The investments to date in the budget and in capital expenditures

  • The expected level of additional budgetary and capital expenditures required to complete the effort

  • The best guess as to the likelihood of success

  • and the expected benefits/returns to the institution if successful

“To date we have not received that information.

“We also have seen another pause in the liver transplant program operation.  While such events may occur from time to time, the issues reported regarding OPTN’s previous citing, which includes, most disconcertingly, ‘a culture of retaliation for reporting potential problems’ is troubling.

“The medical enterprise is a huge part of who we are as an institution, and we have an obligation to be diligent and to display a proper and appropriate level of critical governance oversight as we install members to the Penn State Health Board.”

There were no other comments on the topic.

I voted NO on the appointments.

Total Vote:  Yea: 32   Nay: 1 (Fenchak)        Abstentions: (Kleppinger, Wagman)

  • Action Item 4:

Will the Board of Trustees adopt the following resolution: RESOLVED, that the following individuals are appointed/reappointed to the Board of Directors of The Milton S. Hershey Medical Center for a term of three years and until his/her successor is appointed and takes office or until his/her earlier resignation or removal, subject to confirmation by the Board of Trustees of The Pennsylvania State University, with terms to commence July 1, 2024 through June 30, 2027:

Ms. Kathy Pape, Mr. Peter Tombros, Mr. Todd Rucci, Dr. Tony Farah

This is the appointment of directors to the Hershey Medical Center Board of Directors. 

I voted YES on the appointments.

Total Vote:  Yea: 35   Nay: 0

  • Action item 5:

The re-appointment of Nicholas Rowland, faculty member at Penn State Altoona, to remain as the Board’s Faculty Trustee.  Mr Rowland has been on the Board after first being appointed to this seat in 2022.

I voted YES on the appointment.

Total Vote:   Yea: 34   Nay: 0          Abstention: 1 (Rowland)
 

  • Action Items 6 and 7:

barry fenchak appointed trustee voting records

Items 6) and 7) were re-appointments of existing appointee trustees:  Business and Industry Trustees Rob Fenza and Mary Lee Schneider, and At-Large Trustee Julie Anna Potts.

My comments:

“There are important considerations with regard to these appointments to the Board.  I have concerns with regard to the willful roadblocks that have been presented with regard to the sharing, disseminating, and deliberation of information among the Board, and any member of the Board

“According to Pennsylvania statute, every Board member is entitled to ‘receive information regarding the assets, liabilities and operations of the corporation.’

“In addition, the majority of this Board is appointed, not elected.  This presents many concerns.  Any Board so composed, including ours, carries with it systemic governance risks, not the least of which is the potential for dilution or conflict with regard to whom do the trustees feel a sense of duty; to the institution, or to internal loyalties responsible for their position on the board.

“These potential red flags have proven to be, in actuality, very apparent and impactful.  They have, over the years, negatively affected the best interests of the institution.  

I was the only one with any comments on this Action Item. I voted NO on the appointments.

Action Item 6) Total Vote:   Yea: 31   Nay: 1 (Fenchak)    Abstentions: 2 (Fenza, Schneider)

Action Item 7) Total Vote:   Yea: 32   Nay: 1 (Fenchak)    Abstention: 1 (Potts)

To conclude the meeting, the winners of the Alumni trustee elections were announced: Brandon Short (incumbent), Matt McGloin, and Carl Nassib. Current incumbents Alvin deLevie and Steve Wagman* were not re-elected.

Current Agricultural trustees Don Cairns and Chris Hoffman were re-elected by the Agriculture Caucus.

*Alumni Trustee Steve Wagman, who was not re-elected, was re-appointed to the Board of Directors of Penn State Health.
As a member of the Penn State Board of Trustees, I will from time to time be made aware of certain confidential information.  I will also engage with Trustees and administrators in private, off-the-record conversations, with the expectation of privacy on both parties. I take these expectations seriously, as they are required in order to catalyze important discussions. As a fiduciary, it is also important that I engage in conversations with all stakeholders of the University. Stakeholders like you.  Discussions will involve publicly available information and issues before the Board, as well as my personal thoughts, concerns, and ideas. I also will continue to solicit your thoughts, concerns, and ideas, and plan to engage in meaningful conversations with you on those topics. I hope that you will continue to share your concerns and ideas with me.
You can contact me at barryfenchak.com. 

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