Transcript of Penn State Board of Trustees FBCP Committee Meeting 9 November 2023

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Transcript of the Finance, Business, and Capital Planning Committee Meeting of the Penn State Board of Trustees

Thursday, November 9, 2023

https://psu.mediaspace.kaltura.com/media/FBCP+Committee+Meeting+-+November+Board+of+Trustees/1_16t8ajaf

News report being questioned: 

 Transcription begins at 11:58:

Trustee Rob Fenza, Chair of the FBCP Committee (RF):… I hope everyone had a chance to take a look. Now, any further questions or comments? Okay, Barry? [Few words of discussion] Yes, I was gonna conclude the meeting, but I wanted to leave it open for any questions or comments.

Trustee Barry Fenchak (BF): I know everybody has places to go, so I will be brief.

When I saw the agenda for today’s committee meeting, I found it interesting that seven or eight months after raising concerns and being told adamantly by board leadership that multiple meetings would be convened to discuss the options and alternatives regarding Beaver Stadium, whether they be options of larger scale or smaller scale than the $700 million renovation project.

And to date, there have been zero of those meetings by this committee where one might expect those to be brought up or any others.

 And in the meantime, we’ve had statements from Penn State leadership clearly announcing that the $700 million project, as far as they were concerned, was moving forward.

 This is, of course, the largest single capital expenditure in the history of the university. And that despite no deliberations on such options and alternatives occurred within the board. I could reference some of those statements from Penn State administration, but I won’t do that now.

 So as very vigorously stated by board leadership, when and where will this committee or others engage in those public deliberations? Or was that a misstatement on the part of board leadership? Or did something change?

 Is that a breakdown of communications between the board and the administration in that regard? So I’ll leave it at that and send any more detailed comments and concerns forward in writing. But if you have any comments on that or responses.

RF: Barry, let me be specific about some of the timing. And I appreciate your question. We have a game plan to, at our January meeting, to have an ICA presentation and to have much more detail presented at the time.

Sometimes, you know, there are things that get into the paper that maybe aren’t ready for primetime. But what happens in this committee is on an official schedule. And you didn’t see anything on today’s agenda, but you will see something on January’s agenda for more detail and more deliberation, more questions and answers on the stadium and on all of ICA. That’ll happen in January.

BF: Now, will that include the alternatives?

RF: We have a call. I’m sorry.

Sara Thordike, Sr Vice President for Finance & Business and Treasurer of Penn State University (ST): January will include an update on the ICA financials just like we have done in the past. The actual stadium financials and project will probably be after January, but it will still come back to FBCP.  

We’re just not ready yet.

 BF: My concern is that that meeting in January will be on that renovation project and not evaluating the options and alternatives.

We’ve gone a long way down the road from nearly a year ago when I first raised these concerns and was made quite clear that from the part of board leadership that those meetings were going to take place before we moved further down that road.

We’re a long way down that road and administration seems to feel it’s a done deal. We see the reports coming out from ICA and what have you. I’m very concerned that we still have not done even the rudimentary steps to evaluate those options as we continue on down.

We’re looking at taking on as I believe the most expensive capital project in the history of the university. I just don’t know where that stands and I’m concerned about that.

Matt Schuyler, Chair of the Penn State Board of Trustees (MS): I think Rob, you stated these facts will get to it. We’re not ready yet. Management is not ready yet. What you read in the paper is not what’s being brought forward. We’ll bring it forward at the appropriate time as Sarah and Rob just described. There is a process to do that. We’ll follow that process.

Trustee Anthony Lubrano (AL): What concerns me around this is that there was communication coming out of the university with respect to the consultants that were hiring and some reference to $700 million.

MS: So yeah, I can, I think address that and others can add. As you know, this body has approved $70 million towards this project. We would fully expect that management would take the authority of the 70 million and go about the initial stages of the process, which they are doing. And those initial stages involve the selection of consultants and advisors.

AL: Yeah, I’m not suggesting that was inappropriate. What I’m suggesting is that they threw out a number. It’s for renovation. This is what we’re doing. There’s no comparison to the other options. That was, I think, the point of, I think what Barry just read.

MS: Yeah, I think that’s where the news is ahead of the facts and not grounded.

And so obviously the advice of the consultants and advisors will lead us to recommendations relative to pricing and all the totality of the project, but we don’t know yet. So the 700 million is, in effect, a general number that we’ve used to describe the project, but not exact yet.

Trustee Mary Lee Schneider (MLS): Okay, if I could. And there will be a pro-forma that will go with it.

So there’ll be pro-formas on the different scenarios as part of what Pat [Kraft, Penn State Athletic Director] and his team is doing.

BF: That’s what I’m saying. But will those be pro-forma’s on this project or slight variations of this project.

MLS: Yes.

BF: That’s my concern. I mean, it may be that it would be more fiscally responsible to do a brand new rebuild of the stadium. It may be that it would be much more fiscally responsible to properly maintain the stadium, to support the operations as they more or less currently occur.

And I haven’t seen a thing, despite numerous attempts to try and find information, the bottom line is the only information that I was provided with was that this project was the most we could afford to spend.

 And so there we are with no, I would say no analysis, no even mention of other options. And that concerns me.

MLS:  And we didn’t approve it. And Pat’s working through the proformas for those as is and those other scenarios, different revenue streams, a lot of things. So again, January, February, that’s when I think those discussions can happen.

BF:  Okay, well, I’m gonna expect, and I think the board should expect that we will see very thorough analysis of different alternatives without, I don’t necessarily know how to phrase this, but without a perfunctory step towards this project as currently defined in its broad scope, right?

So I’ll wait, but I’m very concerned. And I don’t know why it wouldn’t be much more prudent to have addressed these options upfront five years ago, let alone eight months ago, when we first started to take a serious look at quote unquote Beaver Stadium and what to do about it.

But we’ll see what happens in January.

RF: Okay, thank you. Do we have any other questions? Okay, thank you.

 

Meeting adjourned at 19:24.

 

 

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