Meeting Minutes

Annual Meeting

June 4, 2008 at 3 p.m.
Carl Sandburg Auditorium

Welcome and General Remarks: President Joe Vaughn called the meeting to order at 3:05 p.m. and welcomed all those present. Approximately 250 members were in attendance for the meeting and the buffet dinner following that was hosted by President and Mrs. Peters in the Duke Ellington Ballroom. In his opening remarks, President Vaughn stated that SUAAAction, a Political Action Committee of SUAA funded by voluntary contributions--not from dues money-- is up and running. Vaughn thanked contributors and advised those who contributed $50 or more to see Lee Ann Henry after the meeting for a special “thank you” letter. In other developments, NIUAA has a newly designed website, which contains information about NIUAA activities, provides meeting minutes and offers a Volunteerism link. Joe Vaughn thanked the membership for its prompt and overwhelming response, following the February 14 tragedy, to the NIUAA email call for volunteers for the Family Assistance Center. NIUAA is discussing a Survivors’ Assistance program; additional information will appear in the NIUAA Newsletter. NIUAA cosponsored with the Alumni Association NIU Day trip, May 7, to Springfield and hosted a reception in the Governor’s Mansion for the dozen state legislators who are NIU alumni. We used the opportunity to make the legislators aware of our problems. He thanked the Alumni Association for running a very smooth event. President Vaughn noted we’ll hear more about SUAAAction from Irene Rubin, a SURS update from Steve Cunningham, and legislative update from Senator Brad Burzynski and Representative Bob Pritchard. Unfortunately, the General Assembly adjourned without acting on the pension bond issue.

Approval of the Agenda: President Joe Vaughn submitted the agenda to the membership for their approval. Motion was made by Gary Gresholdt to approve the agenda as submitted and was seconded by Pat Vary.

Approval of Minutes: President Joe Vaughn requested that if there were no objections to the minutes of the Annual Meeting held June 6, 2007, a motion to approve the minutes be made. A motion to approve the minutes as presented was made by Bill Monat and seconded by Lou Deprin.

Treasurer’s Report: Treasurer John Engstrom provided a written report for the membership. He reported that we had had a good year financially. We had $16,903.34 in our checking account and in our two CD’s. The audit will be done after the June 30 closeout and a report will be presented at that time. A motion to accept the Treasurer’s Report was made by Marjorie Rey and seconded by Gary Gresholdt.

Membership Report: Chair Gary Gresholdt reported that we have continued to recruit new members by writing to new retirees, contacting individuals attending events and by talking to friends and neighbors, which is the most effective. We have 1772 members, an increase of 32 over last year. Two thirds of our members elect dues deduction, which we encourage for seamless membership. Gresholdt encouraged individuals to join the Annuitants Association directly through the NIUAA rather than through the state office, he praised Lee Ann Henry as an invaluable asset, and he thanked all members.

Public Relations/Events Report: Chair Steven Johnson noted various upcoming events, including the Chicago Printers Row Book Fair and a fall cruise. He made special mention of the “No Book” Book Club, which has had good attendance. Linda Peterson facilitates these meetings at which members bring their own books to discuss. These events are listed on our web page and in the Newsletters. He solicited ideas for other events from the membership.

SUAA Action Committee Report: Chair Irene Rubin reported the Political Action Committee is up and running. SUAA is our political lobbying group in Springfield, but it cannot donate money on behalf of the association to candidates. We need the legislators and the governor to support our pensions, and one way to get their attention is to support their campaigns and attend their fund raisers. We need to inform them of our issues and to let them know that we are organized and that we vote. To date at NIU we have collected over $17,000 from approximately 500 of our members. This is an appropriate amount to contribute to local races, but the leadership expect larger contributions, and they have more expensive fund raisers. We also need to write letters to the editor, we need to organize coffees, and we need to explain our case to our friends and neighbors who are not necessarily members of the Annuitants Association. We need the voters on our side. We have used funds so far for mailings and surveys to our members, to send members to fund raisers, and, in the past, to attend Lobby Day in Springfield. Our local legislators know the issues about which we’re concerned, but members in other districts should contact their legislators. We can coordinate their attendance at fund raisers and get their fees paid. For the state to live up to its obligations is not a partisan issue. We must take actions to protect our pensions. The state is running a deficit this year. Next year’s budget is unbalanced. The House refused to pass any of the revenue measures that the Governor proposed and did not even vote on the pension bond issue. This highlights the need to have the legislators on our side. The Constitutional Convention vote is coming up this fall as a statewide referendum. There is much more support now for a Constitutional Convention than the last time it was on the ballot, 20 years ago. There is an increase of anger at state government. This is a less than ideal time to revise the constitution, and protections may be removed from our pensions.

This issue could result in three separate elections. If it does, we need to participate. First, in November, there will be a vote to hold the Constitutional Convention. If it passes, we would need to run for and win seats as delegates to the Convention. There will be two delegates elected from each senatorial district. Then there will be third election in which voters will need to approve recommendations from the Constitutional Convention. It seems unlikely that voters will vote against reducing pension benefits for state employees, so we need to make sure this doesn’t come to a vote phrased in that fashion. For all these reasons, we need your continuing support and participation. If you want to know what you can say or do or want to be kept informed of developments, please contact me at irubin@niu.edu.

Change to NIUAA By-Laws: President Joe Vaughn presented an amendment proposed by the Board to the NIUAA By-Laws to make official the policy we will maintain the integrity of member email and mailing addresses and that we will use these to inform members of only issues directly of interest to them as NIU annuitants. Vaughn called for a motion to accept the proposed amendment to the By-Laws. A motion to approve the amendment was made by Arra Garab and seconded by Bill Monat. During discussion, Marjorie Rey noted a typographical error and asked that “fron” be corrected to “from” in the last sentence of the amendment. The question was called and the amendment was approved.

Presentation of Appreciation Award: Gary Gresholdt stated that the Board had unanimously accepted his Committee’s recommendation of the individual to receive this year’s award for significant contributions of leadership or service to the Association. Gresholdt presented this award to Jay Monteiro, for his invaluable assistance in arranging for the production and distribution of our new brochure. Joe Vaughn noted his appreciation for Jay Monteiro’s unfailing flexibility and good will in assisting the Association.

Recognition of Outgoing Officers and Directors: President Joe Vaughn recognized the following Officers for all their hard work during the year: Vice President, Linda Schwarz; Treasurer, John Engstrom and Past President, Bob Rosemier (unable to attend). Pat Sauter who was Secretary at the start of the year, suffered an in-home accident and was unable to continue her duties. Lee Ann Henry and Linda Schwarz filled in for her the rest of the year.

He recognized the Directors: Scott Banish, who is leaving the Board this year at the completion of his term, was one of the co-signers of the SUAA Action letter; Jerry Halvorson, who chaired the Nominating Committee and is completing his term on the Board and will be leaving; Joe Koch; Gary Gresholdt, who is Membership Chair; Bob Wheeler, who chairs the Benefits Committee; Marjorie Rey, who did yeoman duty, along with Benetta Stearnes in organizing and running our Holiday Party; and Pamela Farris.

He also recognized the chairs of the individual committees: Steven Johnson, who runs the Events Committee; Irene Rubin, one of the co-signers of the SUAA Action letter you received; Benetta Stearnes, who operates our Intergenerational Program; and Charlie Larson, Communications Chair. In addition, Alan Voelker, who is a member of the statewide Board of SUAAction. He also praised NIUAA’s university liaison, Lee Ann Henry.

Election of Officers and Board: President Joe Vaughn explained that the President and Vice President serve two consecutive one-year terms, Board members serve two consecutive two-year terms, and the Secretary and Treasurer serve four consecutive one-year terms. Vaughn introduced Jerry Halvorson, chair of the Nominating Committee.

Report of the Nominating Committee: All Officers are elected for one-year terms. For President, Joe Vaughn; Vice President, Linda Schwarz; Treasurer, John Engstrom; Secretary, Chris Welch. Board members: Gary Gresholdt, second two-year term; Joe Koch, second two-year term; Jerry Meyer, first two-year term; Benetta Stearnes, first two-year term. President Vaughn asked for a motion to approve the slate of the Nominating Committee. Larry Sill moved and Lynne Waldeland seconded acceptance of the Nominating Committee’s Report. President Vaughn announced that persons wishing to nominate a person from the floor must have the approval of the person they wish to nominate; and he called for nominations from the floor. There being none, Mark Thackaberry moved the nominations be closed. Joe Vaughn asked for a request for a unanimous ballot. Pat Vary so requested; Marjorie Rey seconded. President Vaughn once again thanked outgoing Directors, Scott Banish and Jerry Halvorson.

Comments from the Floor: Stacey Dolby asked to be recognized to state his concerns that although NIU has a substantial number of minority active employees and retirees, only a relatively small number of minorities participate in the Board and in the NIUAA activities. President Vaughn noted Mr. Dolby’s concerns and will consider them.

Special NIUAA Presentation to President John G. Peters: On behalf of the NIUAA Board and membership, President Joe Vaughn read a Resolution adopted by the Northern Illinois University Annuitants Association regarding the leadership and support provided by Northern Illinois University in response to the tragic events of February 14, 2008. Joe Vaughn then presented President John Peters with a check in the amount of $5,000 for the February 14 Student Scholarship Fund.

A Reflection of the Past Year at NIU – President John G. Peters. President Peters thanked the Annuitants Association for their contribution to the Scholarship Fund. He stated that he and his wife, Barbara, are extremely proud to be members of the Annuitants Association. He appreciates our contributions to NIU. He recognized the presence of former President and Chancellor Bill Monat and commended Professor Irene Rubin for her talk on the situation in state government.

As of today, we have more than 1400 individuals and groups who have contributed to the February 14 Scholarship Fund, which is a General Scholarship Fund, and a few named memorial scholarship funds that families have started. With this NIUAA contribution, we have $468,000 in contributions to this fund, although this hasn’t been a focus for fund raising. An additional $40,000 has been received for named scholarships. We’re getting ready to award those scholarships soon and to package those monies with other monies to give each student a more significant award.

President Peters emphasized that the awarding of undergraduate and graduate degrees is a major mission of NIU. He praised this generation for their social conscience and, as demonstrated by their response to the February 14 tragic events, for their tremendous compassion and resiliency in dealing with an unimaginable crisis.

Thanks to our well trained professionals, NIU responded excellently to the tragic events of February 14. The world found out about Northern Illinois University, and we discovered things about ourselves. We are known now as an institution that is caring and takes care of its own. President Peters saw heartrending acts of kindness, and he saw people roll up their sleeves and cooperate with each other at unusual levels. He is determined to make this feeling of giving and compassion and cooperation last. He cited the tremendous response of the greater DeKalb-Sycamore area, from the First Responders to citizens baking cookies. He has received many requests to speak nationally and internationally. Officials at other institutions want to know what it was like. What do you say? What it comes down to is training and good people and an institution that knows itself.

President Peters thanked State Senator Burzynski and Representative Pritchard for their support generally and in response to the February 14 events. Serious issues must still be resolved in state government, including the lack of a capital bill, and there is a nervousness and anger among the public throughout the state. The price of gasoline, for instance, affects NIU in an indirect way, because so many of our students come from long distances to attend classes, and it adds significantly to the cost of their education.

He is concerned that the cost of education will put higher education out of the reach of some of our students. The pension issue concerns us, of course, but we have to recognize the public does not have much sympathy for government-backed pensions. We must continue to educate our legislators in this issue.

This year has been a very difficult year, starting with the great August flood right after Move-In Day. With this beginning, we have used creativity and innovation to overcome physical plant problems as well as the particular problems following the February 14 tragedy. This summer, we’re moving a lot of dirt on campus. We’re working with an aging physical plant. Among other things, we’re putting in a new Chiller in the East Campus, and we’re completing our Title IX requirements with new physical plant. We have had a myriad of unforeseen costs this year and have used funds for triage. We are in the midst of recovery efforts that will cost $8 – 9 M and will ask the legislature for assistance. In sum, the year has been characterized by triumph and tragedy, success and challenge and growth and limitations.

Going forward, I think the future is bright for NIU. We are developing a Strategic Plan to improve our success rate, develop clusters of research and to serve the region better. Great teaching and research is taking place here, and we have become involved in exciting, out-of-the -box endeavors, such as our proton research project in the DuPage Tech Park, which is the anchor of that Tech Park. Northwestern University will provide the physicians. We have linked this endeavor with our academic programs, including the physics program and the health programs. Hopefully, we’ll become a national training program for proton therapy.

Barbara sends her apologies for not being here, and I won’t be at dinner with you, either. We are hosting a barbecue cookout at the Residence for the Orientation Leaders. These Orientation Leaders are our front line in trying to convince the parents that NIU is safe.

Again, thank you for your support. “You know where I am if you need me.”

Legislative Recap

Senator Brad Burzynski: It’s a pleasure to be with you. Last year at this time, he and Representative Pritchard were unable to attend this function: we were still in Springfield, in political gridlock. The only difference this year is that we’re here in the midst of gridlock. Much has to be done, and your participation is key in accomplishing what is important to you and to the citizens in the State of Illinois. Senator Burzynski encouraged us to become involved in the political process. He was pleased that NIU had several people in Springfield for NIU Day. They talked to the legislators and made the needs they see in higher education known. He expressed hope that that event grows in the future. It’s vital to know who your legislators are, to contact them, and to make use of the tremendous network available through the University and the Annuitants Association.

State Budget: Passed a budget last week $60 B budget, with a $2.7B shortfall for the coming fiscal year beginning July 1. The Governor is not and he should not be excited about this budget. The $2.7B shortfall is compounded because we still have a shortfall of about $750 M in this Fiscal Year budget, and then we have about $1.2B of Medicaid payments that we haven’t paid. Budget deficit grows quickly from about $2. 7B to about $4.7B.

The formula for pension funding this year $ 2.3B appropriated; but we need $2.8 B to start paying down the pension debt, but we have a continuing appropriation so that will come out of General Revenue funds, perhaps from Education. And our pension debt will increase about $9 B this year. Many issues still to be faced. Some good news: there’s a lot of Excellence on this campus; there’s Resilience; Understanding of the issues and process and of the need for compromise; Participation; and Tenacity. Thank you for the opportunity to be here today.

Representative Bob Pritchard: Thanks to Joe, the Officers and Board members and all members for representing the real spirit of Northern Illinois University. His wife is a new member in the Annuitants Association. We have seen many things change in the past thirty years, when she joined Northern Illinois University. He cited the unwelcome changes in society in the intervening years from a can-do attitude built around family and neighborhoods and responsibility.

In Springfield, we’ve seen unwelcome change, too. We need to return to the days when we were more responsive to the people’s needs. Bob Pritchard looks forward to working with us, as he works to fulfill the moral commitment made to us when we were first employed at NIU. We need to return to the great American spirit we saw on February 14, with people rolling up their sleeves and working together. He encouraged us to talk to our friends in other areas of the state to come up with better ideas, new solutions. He and Brad Burzynski are doing this by brainstorming and reaching across the legislative aisle to solve problems. Perhaps we need to have our own debates about how the government can better serve the people.

A Progress Update of the NIU Foundation: Mallory Simpson, President of the NIU Foundation, thanked the membership for its support and for the collective gift to the February 14 Scholarship Fund. We have raised $120 M toward our True North campaign goal of $150 M. Annuitants have given more than $586,000. We have a $40.3M endowment, and last year we had better than average returns compared to other institutions with similar size endowments. NIU’s True North campaign is about Making a Difference. Our donors are changing lives. Donors are increasingly dedicating their endowment dollars to scholarship support and to faculty support. Since the beginning of the campaign, the amount of money going into scholarships has quadrupled.

SURS Sound; Unfunded Liability Problem Remains: Steve Cunningham, Associate Vice President, Administrative and Human Services, complimented SURS Executive Director, Dan Slack on the sound SURS fundamentals. That is, SURS has the lowest administrative costs and provides among the highest rates-of-return on investment among the Illinois pension systems. Thus, it has the lowest state contribution rate. Moreover, SURS is a relatively efficient and low-cost system compared to the rest of the state retirement systems: Total State Contributions to SURS are currently under 10%, as opposed to nearly 25% for SURS and 14% for TRS. However, SURS performance reflects the general poor economic conditions: its funding ratio, as of April 2008, was more than 5% lower than at the close of the last fiscal year; and the current annual rate-of-return is 0%, as compared to more than 18% last year. The unfunded liability problem remains. It is solely related to the State of Illinois’ historic failure to appropriate the State’s share to pension contributions over many fiscal years. Employee contributions were fully paid. It is important to note that the problem is not an issue of overly generous or exceptional benefits for higher education employees. SURS accounts for only 4.1% of Illinois’ unfunded pension liabilities, yet accounts for 24% of participants. FY 10 will represent the “top of the ramp” with respect to the 50-year funding plan. FY 10 is the 15th year of the 15-year ramp-up. Thereafter, the annual increase in funding requirements will level off at a predictable level for the remaining 35-year period. Cunningham cited the problem of the looming Constitutional Convention, and he complimented Irene Rubin on her thorough report. He emphasized the importance of SURS, which is the only retirement program for public education employees, and, because SURS participants do not participate in Social Security, the State does not also have to pay the employer co-payment. Again, although SURS accounts for a small percentage of unfunded pension liabilities, it accounts for almost a quarter of all participants.

Awaiting Benefit Choice Changes: Human Resources Benefits Manager, Dennis Da Vito, reported that there was still an impasse on negotiations for health care carriers. The first benefits choice period just ended. There will be a second, but we don’t know whether it will occur in August or perhaps in the fall. We will receive another booklet. HRS will make sure everyone is informed. Access www.benefitschoice.il.gov for changes. On the positive side, there will be a slight reduction in life insurance premiums.

Adjournment at 5:05 p.m.