Minutes of the
NIU Board of Trustees
FINANCE, FACILITIES AND OPERATIONS
COMMITTEE MEETING
September 17, 1998

Dr. Norris referred to Agenda Item 8.a.(5) under the President's Report, the DuSable Hall Renovation Project-Phase II Approval. I probably have pestered the President more than anybody else, he said, and way before anybody else about this building. DuSable is a major teaching building on the campus. It is a very poor place to teach, Dr. Norris said, and I want to express my appreciation and thanks for the fact that you are beginning to make some renovations. He also referred to Agenda Item 8.b.(7), FY99 Compensation Benchmarks and Increment Summary Report. We appreciate the Board's action in providing us better benefits and adjusting our salaries, and we are appreciative of the compensation benchmarks and the increments. 

Academic Affairs, Student Affairs and Personnel Committee
Committee Chair Susan Grans reported that the Academic Affairs, Student Affairs and Personnel Committee met on Thursday, August 27 at the Rockford Education Center. Chair Grans expressed her appreciation to Board members and university staff and faculty for joining the Committee for a very informative meeting. She also expressed her appreciation to Director Greg Petty and staff at the Rockford Center and Dr. Lynne Waldeland for coordinating the meeting. Among the items covered in that meeting were action items on Requests for Degree Authority at Off-Campus Sites, Compensation Benchmarks and FY00-02 Increment Priorities, Tuition Waiver Program for Employee Children and Accumulative Sick Leave Options Pertaining to Employees on Temporary Appointments. Information items covered were the 1998 Report on the Participation and Achievement of Underrepresented Groups, an FY99 Increment Summary Report, the 1998 Productivity Report and a report on the Rockford Education Center. Most of these items were forwarded to the Board for consideration in this meeting. 

Finance, Facilities and Operations Committee
Committee Chair David Raymond reported that the Finance, Facilities and Operations Committee met on Friday, August 28. The Committee considered and approved several capital projects, including the second phase of two projects currently underway, the Stevenson Towers residence hall renovation and DuSable Hall classroom building renovations. Chair Raymond said he had the opportunity to tour both of those facilities after the meeting and was very impressed with the work and its progress. The Committee also approved capital projects, including the Center for Equity Services, modifications to Adams Hall and the siting of a historic one-room schoolhouse. Other fiscally-related agenda items considered were the FY99 internal budget and the tuition waiver program for children of employees. The Committee also heard several 1998 annual reports on transactions, obligation of financial resources, capital activities and transactions involving real property. These items and others were included in the President's Report for consideration by the Board in this meeting.

Trustee Raymond went on to say that this was his last meeting with the Board of Trustees and expressed his great appreciation for the opportunity to work with NIU and higher education in Illinois. It has been a tremendous experience, he said, and I hope I can find an opportunity to do this closer to Washington, D.C. where I am located now. As I look back on what we have accomplished in the first years as an independent board, it has been really remarkable. We have had tremendous accomplishments and made great progress. Look at what is going on now on the West Campus, the renovation of Stevenson Hall and what I saw going on in DuSable, Trustee Raymond said. I cannot imagine how you were able to operate in that facility before we started on this renovation. He mentioned other achievements such as the new Latino Center, Child Care Center and other capital improvements, and the Altgeld Hall renovation. The innovative tuition plan approved last year and the recent real estate acquisitions on the west side of the campus and at Hoffman Estates are all part of a remarkable list of achievements that the whole Board, the President and his staff, and the rest of the community can share, Trustee Raymond said. It has been a tremendous experience and I really have appreciated it. As I mentioned before, he said, one of the reasons I endowed a grant for technology and teaching was to give me a reason to come back once a year and see who is going to receive the grant for the next year. So, I look forward to visiting in the spring and staying in touch in the future. Thank you very much.

Legislation, Audit and External Affairs Committee
There was no report from the Legislation, Audit and External Affairs Committee.

Illinois Board of Higher Education
President La Tourette gave a brief update of activities at the Board of Higher Education. Dr. Keith Sanders, who joined the board just a few months ago, has put in process a number of changes. First of all, the President said, I should mention Dr. Sanders' attempt to develop what is called a "citizen's agenda." This attempt will focus on the development of a white paper to explain the role and position of higher education in the state and the impact it has, not only on the standard of living in the state and its future economic development, but what higher education brings in terms of cultural and social amenities to the state. That is in progress, with the objective of having this white paper prepared for the new governor and the new legislature when it comes into session in January. The President said he would report more on this as the format becomes more focused and definitive.

Secondly, Dr. Sanders is attempting to make the budget process more open. He would like to see that the requests of the presidents, which are brought to open meetings at the IBHE when the IBHE is considering such things as the preliminary budget for Fiscal Year 2000, are presented to all of the university rather than having the recommendations kind of disappear until they reappear on the agenda for the Board of Higher Education meeting. In conjunction with that process, the critical meeting for the Board of Higher Education will be moved from its traditional January date to December. This year, these recommendations will be presented at a meeting of the Board of Higher Education, which is tentatively scheduled for December 15. President La Tourette said he and Board Chair Boey had, as a result of this process, already attended a meeting with the staff of the Board of Higher Education. This was the first of two or three meetings that will occur before those recommendations are finalized and presented to the Board of Higher Education.

Finally, the President said, the recommendations of a consultant retained by the Board of Higher Education on streamlining processes such as program review and program approval should be available soon. I think it is essential for the more effective and efficient operation of the Board of Higher Education to reduce the time involved in these processes, President La Tourette said, and to give universities more flexibility in responding to changing student needs, particularly those related to technological change and to the needs of people in the work force for additional information or training to be more competent in their positions. We have yet to see the results of these three initiatives the new executive director has put in place, the President said, but I think the progress thus far has been positive.

President La Tourette also mentioned the emergence of a new model for responding to higher education needs, particularly those of people who are placebound and cannot either commute to a university or move away from home and become a residential student. It is proposed that a university center be established in Lake County, jointly funded by state and county authorities with programming from the universities, currently offering programs there. Northern Illinois University is one of those universities and is being given the opportunity through an RFP process to respond to needs that have been identified. A deadline of October 15 has been established for universities to express interest in offering programs through this university center, which is expected to be located somewhere near Grayslake where Lake County Community College is located. The President said NIU intends to respond because the university has been responsive to needs in Lake County historically. There are several programs being considered by the Provost's Office that can be brought forward to meet this deadline, he said. One problem is that the cost parameters and some other critical issues for this operation have not been fully articulated. However, we will pursue it, the President said, because we have many students who come from Lake County, most of whom reside on campus. NIU has had a long relationship with Lake County Community College and just recently entered into a joint admission program for undergraduates who start at the College of Lake County. We feel we have a representative from that county in Trustee Siegel, the President said, and we feel that Northern can play a very important role in meeting the county's needs for educational attainment.

University Civil Service Merit Board
There was no report from the University Civil Service Merit Board.

Northern Illinois University Foundation
Mr. Michael Malone, Vice President for Development and University Relations, made a report that focused on fiscal year numbers showing total support for Northern Illinois University by the NIU Foundation, the Foundation endowment status and an update on the new NIU Telefund.

I am very pleased to report to the Board and the university community that support for NIU as recorded by the NIU Foundation hit an all time high in FY98, Mr. Malone said. It is our best year ever in terms of fundraising. Support for NIU recorded by the NIU Foundation was up 28% to $6.8 million. This is an increase from last year's $5.3 million, which was an increase of 29% over the previous year. Because fundraising totals can jump from year to year based on the receipt of one or two single major gifts, Mr. Malone said, it might be useful for the Board to consider the following averages. For Fiscal Years 1992 and 1993, the NIU Foundation averaged $2.1 million annually, and for Fiscal Years 1997 and 1998, the average was $6.1 million annually. The increase in that five-year period was 190%. So, in spite of spikes in major gifts, he said, the base of support is going up significantly. The endowment of a university is its permanent base for continued support for students, faculty and programs in perpetuity. A portion of the interest is expended annually, Mr. Malone said, but the principle is never invaded and it is protected from inflationary pressures. NIU's endowment grew 42% in Fiscal Year 1998 to $14.3 million. Approximately half the growth was due to additions to the endowment and half to the increase in the value of investments. The endowment enjoyed a total rate of return net of fees of nearly 18% last year. Again, averaging Fiscal Years 1992 and 1993, during those two years the NIU endowment stood at an average of $3.4 million. The average of Fiscal Years 1997 and 1998 is $12.2 million, for an increase of 260% over that same time period.

Mr. Malone also reported the fiscal year results of the new NIU Telefund, the annual fund through telephone calls from students to alumni. One year ago, today, he said, we were still busy installing computers, connecting phone lines, training students and testing software in preparation for our first day of calling on September 25. Over the course of the past year and a half, Mr. Malone kept the Board informed of the decision to bring the telefund operation in-house and use NIU students to make those calls. The NIU Foundation made a sizable investment in start-up costs to augment dollars reallocated within the division. We had brand new systems, brand new staff and had missed one-quarter of the fiscal year when we started, Mr. Malone said, and in this context, I am particularly pleased to report that the new annual telefund has increased net revenue to colleges and departments at NIU by 58% in this first partial year of operation. These are dollars donated by alumni to their departments and colleges without restrictions. The funds can be used for scholarships, graduate assistantships, faculty support, equipment, alumni newsletters, events, etc. The new solicitation cycle for colleges began before the first day of school this year with the return of more than 40 experienced student callers, and the program is expected to continue to grow. One especially proud result reported by Mr. Malone was that 5,000 new alumni donors gave to their alma mater for the first time during this last fiscal year. Alumni are stepping up to support NIU. They like hearing from students, and it is our job to keep them informed and involved in their university, he said. The connection between Alumni Relations and fundraising is an integral one. Two years ago, the President convened an Alumni Task Force to take a fresh look at alumni relations at NIU. Trustee Sanchez is a proud Northern alumnus in that group. The new assistant vice president for alumni relations, Lee MacAuley, began work for NIU and its alumni on September 1. She was the executive director of the alumni association at the University of Rhode Island. A strong alumni association is integral to our success in fundraising. More than anything else, Mr. Malone said, I think the increase in private corporation and Foundation support for NIU is a reflection of the high esteem in which the university is held by alumni, friends and business leaders. This is a credit to our faculty, past and present; to our staff, who make such an important impression on students; and to the leadership of the university, including this Board, who have raised the image and awareness of NIU over the last two years. At any given time during the last fiscal year, the Development staff alone was down between six and eight authorized positions. I would like to thank the people in my division who worked such long hours with such good humor, Mr. Malone said, who stayed through the transition and made my job over the past year and a half so much easier: Alberta Solfisburg, Gerald Bloodsaw, Gary Evans, Bob Heuermann, Bonnie Ward, Linda Spitzer, Shannon Taylor, Jean Jagodzinski, Lee Ann Henry and Marcia Tennison. So, I'd really like to extend thanks to them as well. That concludes my report. Trustee Grans congratulated Mr. Malone and said the involvement of the students as well as the end result speaks to the credibility of the whole program. It is the kind of good news you love to give, and it is the kind of good news we like to hear.

I will be talking about some of the future trends later in my presentation, President La Tourette said, but I want to take this occasion to report to the Board about what I think are some real successes with our tuition plan. The President said this was a preliminary report and that a release would be issued through Public Affairs later. Compared to Fall 1996, enrollment in 1998 increased by approximately 1,000 undergraduates. The number of students taking 15 hours or more increased by about 500 this fall. So, the President said, it is very clear that our tuition plan and all of the educational promotion we have undertaken to encourage students to take 15 hours or more so that they can either complete their degree in four years or in a shorter period of time than they have in the past, has been working. There is a significant shift in the behavior of students as you look at the way they have enrolled this fall compared to the way they enrolled in 1996. I think we need to continue our efforts to make it clear to students and parents what the costs are, President La Tourette said, and what the implications are if they do not take at least 15 hours per semester. The degree requirement here is 120 hours, except in a few areas like engineering and computer science. To complete a degree in four years means a student would have to take 15 hours for eight semesters, to meet the 120-hour requirement. We have had a shift from students taking 12 or 13 hours upwards to 15 hours as a result of the campaign to educate students and parents about costs and degree completion. Also, the President said, the tuition plan is an incentive to the students because the cost of taking each additional course goes down. There has been a good response to that. We are going to continue this effort, he said, in the hope that we will see a further shift in the future. It is recognized that some of students, because of some deficiencies when they are admitted or because they are commuting, may not be able to take 15 hours, but the university is very pleased with this preliminary result.

University Recommendations Forwarded by the Board Committees

Agenda Item 8.a.(1) – FY99 Internal Budget
President La Tourette pointed out that Trustee Raymond's request to separate the income fund and reflect it under nonappropriated revenues had been followed on page 17 of the report. He said that Chair Boey was very articulate in talking to Mr. Sanders about the need for the Board of Higher Education to recognize that control of the income fund has now been turned over to the individual universities. The FY99 budget is projected to be $256.7 million, an increase of about $10 million over FY98. State funds amounted to just over $101 million of that $256.7 million total operating budget. A breakdown of the functional expenditures for both appropriated and nonappropriated funds was shown in Tables 2, 3 and 4. Chair Boey said $101 million in state revenue is a lot of money; but, for a state university that represents only 40% of the budget. For those who think a state university is fully funded by the state, the answer is, it is 40% state funded and the rest is up to us. Trustee Raymond said he wanted to acknowledge that he was glad to see the budget presented in the format that makes the point Chair Boey has made over and over again very clear in black and white. Chair Boey said that President La Tourette did a very good job of articulating our position to Dr. Sanders. President La Tourette asked for the Board's approval of the FY99 internal budget in order to complete the university's budget process for the current year. Trustee Grans so moved, seconded by Trustee Raymond. The motion was approved.

Agenda Item 8.a.(2) – Center for Equity Services Project Approval
As we face the prospect of a more and more diverse student body, we must prepare our faculty and staff to be able to work effectively with that more diverse student body and to be more supportive and more understanding of their educational needs. The university received $75,000 from the Board of Higher Education in operational support for this workforce development and $450,000 from the legislature for this center. Additional funds have been requested. This is a major investment on the part of a public university that has to provide affordable access to all of the people in Illinois, President La Tourette said, particularly those in northern Illinois. This is an investment to make sure NIU is prepared for these projected changes. The President asked the Board’s approval of the Equity Services Center for $450,000, which represents a one-time addition to the NIU budget. Chair Boey asked for a motion to approve the construction of a new Equity Services Center at a budget of $450,000. Trustee Siegel so moved, seconded by Trustee Raymond. The motion was approved.

Agenda Item 8.a.(3) – Residence Hall Master Plan – Stevenson Towers Renovation – Phase II
Phase I of the Stevenson Towers project is being brought to conclusion. The two north towers of Stevenson have been reopened. The food court area will be opened on October 6. The university is now asking for approval of the $10 million needed to begin Phase II. The university would like to complete renovation of the two south towers in time to open in Fall 1999. Chair Boey said he had a chance to tour Stevenson before it was opened and was very impressed. Student Trustee Sosnowski said he also had taken a tour. He reported that the residence halls are now providing a very comfortable environment with fewer students per floor and better living arrangements, and the students were responding positively to it. It will be good to see the rest of Stevenson Towers finished, Student Trustee Sosnowski said, and then, hopefully, we can move on to Grant Towers. Chair Boey said he thought the whole Board shared that sentiment. Trustee Siegel inquired about the difference in room sizes. Michael Coakley, director of student housing, replied that the expanded double is what used to be one and a half double rooms with two students living in it. A three-room suite is two bedrooms and a living room that used to be the same size as three former doubles. A suite holds four people. Chair Boey asked for a motion to approve Phase II of the Stevenson Towers renovation project. Trustee Siegel so moved, seconded by Student Trustee Sosnowski. The motion was approved.

Agenda Item 8.a.(4) – One-Room School House Project and Site Approval
A one-room schoolhouse is going to be donated by a group of people in the community who have been interested in its preservation. It is a wood-frame structure built in 1900. It has been agreed that those donating the property will incur the cost of its removal. The President asked the Board’s approval to accept the donation and the proposed site for this one-room schoolhouse. Student Trustee Sosnowski so moved, seconded by Trustee Grans. The motion was approved.

Agenda Item 8.a.(5) – DuSable Hall Renovation Project – Phase II Approval
President La Tourette mentioned that Dr. Norris had commented earlier in the meeting on the improvements resulting from Phase I of the DuSable Hall renovation project. This is a request to approve the beginning of Phase II, at a budget of $500,000, which will come from the university’s repair and maintenance funds. Trustee Raymond moved to approve the DuSable Hall Renovation project at a budget of $500,000, seconded by Trustee Siegel. The motion was approved.

Agenda Item 8.a.(6) – Adams Hall Modifications Approval
Departments are being moved to Adams Hall as the renovation and restoration of Altgeld Hall begins. The President said departments are being moved to Adams both temporarily and permanently. This $300,000 project involves modifications to Adams Hall to contain several units, such as the Graduate School, Sponsored Projects, Testing Services, and Grants Fiscal Administration. These will be permanent moves, part of an effort to try to consolidate student services in as few buildings and as close together as possible. We were not able to do that with just the Campus Life Building, he said, but Adams Hall is right across the street from the Campus Life Building. Some operations are being consolidated into Williston Hall, and the Bursar is in the north end of Swen Parson. Without constructing one huge building, President La Tourette said, we will have a complex of buildings close together that provides a concentration of student services in a cost-effective way that allows students one-stop shopping for their services. This is part of a much more complex plan to consolidate student services into a few locations and to begin the Altgeld Hall renovation project. Chair Boey asked for a motion to approve the $300,000 Adams Hall modification project. Trustee Grans so moved, seconded by Student Trustee Sosnowski. The motion was approved.

Agenda Item 8.a.(7) – Requests for Degree Authority at Off-Campus Sites
As presented to the Academic Affairs, Student Affairs and Personnel Committee, President La Tourette said, we are proposing to offer a B.S. degree in Business Administration at Motorola University in the William Rainey Harper Community College District, and a B.S. in Nursing in the Highland Community College District and in the Sauk Valley Community College District. Both of these are responses to student needs. It is a direct response to Motorola, the President said, however, the program will be open to other students and not just employees of Motorola. This is a new baccalaureate degree format in Business Administration that still allows the college to meet the standards for accreditation from the AACSB and, at the same time, provide more access for placebound students. The same is true with the nursing programs because there are a large number of nurse practitioners who are anxious to complete a baccalaureate degree and upgrade their skills but are tied to their region either for family or work reasons. President La Tourette asked Board approval to offer these two off-campus degrees as part of the university’s overall effort to continue to reach out to people who are placebound and need additional educational opportunities for their advancement. Trustee Grans commented that this item was discussed in great detail in the AASAP Committee meeting and said the university was to be commended for its response to the needs of the students. Trustee Grans moved for approval to offer the two off-campus degrees and was seconded by Trustee Raymond. The motion was approved.

Agenda Item 8.a.(8) – Fiscal Year 2000-02 Market Equity Priorities
Chair Boey made the following statement: Since its inception on January 1, 1996, the Board of Trustees has recognized that the university’s greatest asset is the talent, productivity and commitment of its faculty and staff. Accordingly, in advancing the interests of Northern Illinois University, employee compensation represents one of the Board’s highest priorities. Consistent with this imperative, the Board of Trustees has supported the NIU administration in its aggressive pursuit of enhanced compensation, benefits and employee relations programs for NIU employees. A key aspect of this effort is a focus on general salary competitiveness. The Board of Trustees endorses the maintenance of equity programs that emphasize competitiveness with the market. The university has been diligent and innovative in developing competitive merit-based salary programs. These programs support our long-run and mutual objectives. Working together, we will continue to make consistent progress toward advancing the interests of the university faculty and staff. In summary, Chair Boey said, this is just a fancy way of saying that we intend to keep our faculty and staff salaries competitive with the market we are in.

President La Tourette thanked the Board for its support of this issue. Mr. Cunningham has reported to the Board on this issue, met with various employee groups and, most recently, met with the Faculty Senate to talk about these issues. We made a major effort to bring some of our civil service employee salaries up to a more competitive level, the President said, because that area had the largest disparity between our existing salary structure and the market. Tenured and tenure-track faculty will be the next area of concentration. Salaries paid by the universities comprising the National Association of State Universities and Land Grant Colleges (NASULGC) and those paid by the Mid-American Conference (MAC) have been constantly monitored, President La Tourette said. Moreover, he said, we look at a list of 40-plus peer institutions with basic characteristics similar to NIU that is compiled by the Board of Higher Education. That peer list includes four of the Mid-American Conference institutions —Akron, Kent State, Miami of Ohio and Bowling Green State University.

In these comparisons, there is a shortfall that we would like to address, the President said. Looking at the midpoint of NASULGC and the MAC average salaries for faculty, we are probably at about 97% of the average. What we would like to do is add an additional percentage point to the salary increases being administered, whenever the state authorizes them. The percentage of increase depends quite a bit upon NIU's enrollment situation, Dr. La Tourette said, so I would encourage all of you to continue your efforts to recruit, retain and graduate students. As Mr. Boey has indicated, only 40% of our budget comes from the state, he said, so we operate more and more like a private institution. Tuition revenues for private institutions are very crucial, and they are crucial to us for salary competitiveness, technological improvements and the kinds of services that can be offered to our students to afford a very high quality educational experience. Chair Boey asked for a motion to approve this plan for market equity priorities for Fiscal Years 2000-02. Trustee Raymond so moved, seconded by Student Trustee Sosnowski. The motion was approved.

University Reports Forwarded from the Board Committees

Agenda Item 8.b.(1) – Periodic Summary Report of
     Transactions in Excess of $100,000
Agenda Item 8.b.(2) – Annual Summary Report - Obligation
     of Financial Resources - Year Ended June 30, 1998
Agenda Item 8.b.(3) – Annual Report of Transactions Involving
     Real Property
The Board has delegated authority to the President to approve transactions up to $250,000. The Periodic Summary of Transactions in Excess of $100,000 showed that of the $4,278,879 in transactions approved, approximately 8 percent were for projects using appropriated funds and just under 92% were for projects using nonappropriated funds. 

The report on the Obligation of Financial Resources showed that 99.49% of all the transactions at the university were under $100,000, or about 48% of the total dollar volume. During Fiscal Year 1998, the President approved only 44 of the 15,081 transactions, or three-tens of one percent of all the transactions, for a dollar volume of about 7.4%. The Board has restricted approval of items over $250,000 to itself. There were 34 transactions approved, or about two-tenths of one percent of all the transactions, which amounted to over 44% of the dollar volume. President La Tourette said the Board's system of delegation of authority has allowed the university to move more expeditiously with transactions, yet the Board has also been involved in some very significant transactions.

The President stated that in the table on page 33, the second column indicated "Transactions Percentage," the third column "Dollar Volume" and the fourth column "Dollar Percentage." There were 13 leases under $250,000. Twelve of the 13 leases were under $100,000 and one lease was between $100,000 and $250,000. The report showed two major transactions approved by the Board, the purchase of 200 acres west of the campus in June 1997 and the purchase of an additional 32 acres in December 1997 that completed acquisitions for the West Campus.

Agenda Item 8.b.(4) – Annual Report on Capital Activities – Fiscal Year 1998
Campus construction for six years, Fiscal Years 1992-97, was shown in Tables 1-5 of this annual report on capital activities. President La Tourette noted that most of the construction activity was funded by revenue bonds. The Board authorizes the issuance of bonds or Certificates of Participation to allow the construction of new buildings or the repair of existing buildings. Table 1 showed a tremendous amount of revenue bond activity, as opposed to capital Development Board activity. This involved the Campus Life Building, the parking structure and the beginnings of the West Campus renovation, including Stevenson Towers, West Campus site improvements, and the Child Care and Latino Centers. Going back five years, the President said, there was a tremendous amount of Capital Development Board activity, involving the $30 million Engineering Building and the $30 million Faraday II. The pie chart in Table 3 showed that in the next couple of years there would be a large amount of Capital Development Board construction focusing on the renovation of Altgeld Hall. With the emphasis on Altgeld Hall and some other projects that were funded from the program originally called "Build Illinois" established by Governor Thompson, President La Tourette said, most of the CDB's activities would be in the restoration or renovation of existing facilities rather than the construction or new ones.

Trustee Raymond asked if there was an update on the situation with the Engineering Building and the clean room. President La Tourette stated that the university had several very productive meetings with the executive director of the Capital Development Board, Mr. Sam McGraw, who has brought to this whole issue a determination to work it through and to provide the kind of facility that the university expected. Dr. Williams and his staff have been working on a daily basis with representatives from Holabird and Root and the Capital Development Board staff. Some of the problems have been solved, the roof issue is near closure, and we are working very hard to deal with the other issues, the President said, the clean room, the mechanical/electrical systems and some of the related activities in the building governed or impinged upon by the mechanical or electrical systems. These range all the way from the operation of elevators to particular pieces of equipment and the air exchange in the building. We are trying to determine where we have a shortfall relative to what was expected, the President said, and what is needed to correct it and provide a satisfactory solution. Dr. Williams said that several people, including Mr. Jim Bryant and Mr. Roland Schreiber of his staff, Dean Kasuba of the Engineering Department and his staff, and University Counsel Norden Gilbert have been very helpful in moving toward an effective, positive resolution of this issue. President La Tourette said that Mr. McGraw had indicated a determination to settle this matter by the latter part of October.

Trustee Siegel asked if Dr. Williams could take a minute or two to explain to the Board the process that the university goes through and what involvement the university has with respect to construction of facilities such as the Engineering Building. In particular, he was interested in the responsibility for the supervision of construction and architecture. Very briefly, Dr. Williams said, in a project that is supported by the state, the dollars are appropriated to the Capital Development Board. Under those circumstances, the university is involved in working with the CDB in the selection of architects. There is a quality-based search that provides a competitive process by which the architects and engineers are selected, after which we are involved with the design. The bidding is then undertaken by the CDB, and we move forward with the decision on the contractor and so forth. All contracts for projects that are appropriated and managed through the CDB are written between the CDB and that particular agent or vendor, although the university tries to remain involved through the construction period to provide input or comments by attending the construction meetings, etc.

Dr. Williams said that Trustee Siegel was correct in stating that the Engineering Building was constructed through the Capital Development Board, so the university's involvement at these meetings was for input only. The university has no contractual relationship with any of the vendors. We, as users, provide a perspective that should assist in the final, positive outcome, Dr. Williams said. State regulations and statutes require that the Capital Development Board be responsible for taking the lead in resolving the problems with the Engineering Building because it was a CDB project. Trustee Raymond asked if the university, as the customer, had the opportunity to sign off on projects to indicate whether or not the end result was satisfactory. There is a sign-off after completion, Dr. Williams said, and nothing has been signed off on the Engineering facility. Dr. Williams said that he appreciated the fact that the Capital Development Board staff and director have gone out of their way to try to work on this particular problem and become involved in the resolution of issues by working in a positive vein trying to help identify not only what the problems are but to work on possible solutions. I wanted to make sure that the process was very clear for the record because there have been some comments made about whether the Board could have done something to prevent this from occurring, Trustee Siegel said, and it is very clear that we did not have any authority to do anything other than comply with the statutes.

President La Tourette said he thought there was a commitment on the part of all parties to try to resolve this without litigation. There is tremendous pressure on the staff of the Capital Development Board due to the number of projects each person has to supervise. The current director has asked for additional state funding for more supervision. The CDB executive director said there were about 1,400 projects being supervised by the Capital Development Board at the present time and around 40-some projects were under dispute. That is a tremendous amount of construction being supervised by the State through the Capital Development Board, and there would be some problems expected along the way when dealing with 1,400 projects.

Agenda Item 8.b.(5) – Year 2000 Compliance
President La Tourette complimented John Tuecke, Associate Vice President, Systems, and his staff, on the wonderful job they have done on Year 2000 compliance, in spite of a large number of vacancies. Because our salaries are less competitive in that area, he said, some of our good, high quality people are being recruited away. He reported that there should be no problems with any critical systems in the year 2000, and there are a few things that cannot be dealt with until that time. Chair Boey said that there is a general misconception about responsibility when talking about Year 2000. NIU, of course, has to be in compliance, the Chair said, but just as important are the suppliers and vendors the university does business with who have to be in compliance as well.

Agenda Item 8.b.(6) – 1998 Report on the Participation and Achievement of Underrepresented Groups
From the Participation and Achievement of Underrepresented Groups report, President La Tourette underlined the fact that NIU now has a minority representation of 24% in its undergraduate student body, with rates of increase in Hispanic, African-American and Asian-American students about twice the state average over the last ten years. These are statistics that are presented annually in the Board of Higher Education reports. All of the people on campus who have worked so hard to help us respond to this diversity, the President said, have done a very good job. We will have a great challenge in the future as we look at the composition of students in elementary schools who will be high school seniors in the year 2006.

Agenda Item 8.b.(7) – FY99 Compensation Benchmarks and Increment Summary Report
In addition to the remarks on compensation benchmarks made earlier, President La Tourette said, the table on page 43 shows that efforts to bring up the clerical civil service personnel resulted in a 7% average market adjustment. When comparing each classification against the benchmark, some differences were relatively small and some were very large. Therefore, some might have received a relatively small percentage increase because they were not very far from the benchmark, and some people could have received above the 7% because they were farther away from the benchmark. The same is true for other salary increments based on merit. Merit means that people are going to be spread around the average of 3.2 percent. In the administration of market adjustments, we have always used merit with the faculty, the President said, and we will continue to do so in the future.

Agenda Item 8.b.(8) – 1998 Productivity Report
Dr. Anne Kaplan and Dr. Lynne Waldeland gave a substantial report at the Academic Affairs, Student Affairs and Personnel Committee meeting. Dr. Kaplan indicated that the Board of Higher Education is increasingly aware of the fact that productivity increases have to be looked at more broadly. We are finding many ways to avoid costs, and, in a sense, that is also a productivity improvement. If expenditures can be avoided, that is a productivity increase. The President said there also has been significant progress in the use of reallocated funds for salary adjustments.

Items Directly from the President

Agenda Item 8.c.(1) – Collective Bargaining Agreements
Three bargaining unit agreements, including wage reopeners for AFSCME, Local 963, and the International Union of Operating Engineers, Local 399, and one full contract reopener with Teamsters, Local 330, were presented to the Board for approval. All of these wage negotiations were completed within the framework established by the Board in June. Chair Boey asked for a motion to approve the three collective bargaining agreements presented. Student Trustee Sosnowski so moved, seconded by Trustee Grans. The motion was approved.

Agenda Item 8.c.(2) – Summary of Grant and Contract
Awards
For the period since July 1, the President reported approximately $5.7 million of grants and contract awards had been received by NIU. Total grants and contracts for FY98 to date amounted to just under $30 million compared to $27.5 million last year, an increase of 9.1% overall. To those faculty and staff who have been involved in grants and contracts, whether for the support of research, instruction, public service or student aid, the effort is very good, President La Tourette said, and I am very pleased by the eight to nine percent increase in these various categories. He asked that UAC members convey that back to the faculty and indicate that when some of the student aid items are cleared out, that $13 million is approximately $10 million in federal government research support that is counted by the Carnegie people as part of the base for considering the classification of the university. The President said he thought that a $15 million base would generate a move from a Doctoral I institution to a Research II institution.

 In answer to a question from Trustee Siegel, Dr. Kaplan said that the totals in the Summary of Grant and Contract Awards could appear in either the fiscal year received or expended. We can have expenditures out of a grant during FY98, when the grant was awarded in FY97, so when we get to the transition of fiscal years, there is not an absolutely perfect correlation of numbers. Dr. La Tourette added that the receipt of a multiyear grant is shown in the fiscal year received, and then the expenditures would be recorded as they occur over the next few years.

Agenda Item 9.a. – Tuition Waiver Program for Employee Children
Mr. Cunningham said that tuition waiver benefits for employee children have a fairly complex history, which was shown in a chart on page 59 of the Board materials. In September 1992, the state legislature established a seven-year standard for the provision of tuition waiver benefits to employee children. At that time, the Regency Universities, Illinois State University, Northern Illinois University and Sangamon State University, provided the benefit as of the date of employment. They all established the seven-year standard and also adopted a three-year standard for new employees, because it was a legislative interest that all universities comply with the seven-year standard. At that time, Northern reached a compromise and adopted a three-year standard under Part 1 of our Board Regulations, Mr. Cunningham said, and a seven-year standard under Part 2 of our Regulations. This situation continued until January 1998 when the seven-year standard was made applicable to all universities, allowing the eligible child of an employee with seven years of employment to attend any of the public universities in the state of Illinois with the 50% waiver. The three-year standard for employees at Northern whose children were attending Northern was retained. The Legislative Audit Commission has recommended that both Northern and ISU bring their policies in compliance with the seven-year standard effective January 1, 1999. Any NIU employee hired prior to that date would still fall under the three-year standard. Any employee hired after that date would be subject to the seven-year standard. Chair Boey asked for a motion to approve the amendment to the Tuition Waiver Program. Trustee Raymond so moved, seconded by Trustee Grans. The motion was approved.

Agenda Item 9.b. – Accumulative Sick leave Options Pertaining to Employees on Temporary Appointments
Mr. Cunningham stated that Public Act 90-65, which established certain retirement enhancements previously discussed in other meetings, also eliminated the compensable policies for sick leave earned after January 1, 1998. Current university policy does not provide accumulative sick leave to the approximately 400 employees who are on temporary appointment. This Regulations amendment would allow these employees on temporary appointment to accumulate sick leave from year to year. Other than cases of replacement during absence, Mr. Cunningham said, there are no new financial payout obligations created by this item. Chair Boey asked for a motion to approve the amendment to the accumulative sick leave options. Trustee Raymond so moved, seconded by Trustee Siegel. The motion was approved.

Agenda Item 9.c. – Amendment to the Bylaws of the Board of Trustees of Northern Illinois University
Chair Boey asked Board Parliamentarian Ken Davidson to give the Board a summary on an amendment to the Bylaws. Mr. Davidson said that this is an information item concerning a possible amendment of the Bylaws of the Board of Trustees as part of the first review and update since the Board’s inception in January 1996. The Board Bylaws require that proposals for amendment of the Bylaws be brought to the Board at least one full meeting in advance of being considered for amendment. In the existing Bylaws, there is a limitation on student trustee voting rights. Recently, the legislature and the Governor amended Public Act 90-0630, authorizing the student trustee to vote on matters in which the student trustee does not have a conflict of interest. That power is effective through June 30, 2001. Mr. Davidson asked that the Board consider amending the Bylaws to conform to state law on this matter. Other changes included conforming to quorum requirements brought about by this same law.

There has also been a change in the Northern Illinois University law on authorized locations for Board meetings, Mr. Davidson said. The Bylaws, then, would conform to state law on that if approved. There are also conforming and practical changes proposed for how quorums are managed in Board Committee meetings, he said, and clarification of the practical powers and role of the Chair when serving in Committee meetings. Chair Boey asked that the Board withhold discussion on this item until it is returned as an action item at the December meeting. President La Tourette requested that any Board members who might have suggestions about the Bylaws transmit them to Mr. Davidson for consideration so these changes can be more expeditiously consider at the December meeting.

On behalf of the Board, Chair Boey presented a plaque to Trustee Raymond that read as follows:

David W. Raymond, member of the founding Board of Trustees, served faithfully and with distinction to establish a strong NIU Board.
     Northern Illinois University
     January 1, 1996 to September 18, 1998.

Trustee Raymond followed up the two presentations with a few words. As I have said several times over the last two meetings, Trustee Raymond said, I have really enjoyed this opportunity to be involved with NIU and higher education in Illinois. It has been a wonderful experience that has been enhanced by the quality of the people I have been able to work with on the Board, in the administration and among the faculty. I have remarked to several people how impressed I am with the quality of the people who are associated with this university. It has been outstanding and has really added to the experience and knowledge that I have gained about higher education. That has made it a real pleasure to work with all of you, Trustee Raymond said. In these first couple of years of this Board, we have continuously had opportunities to address issues that look like they were festering for years. Since I did not know much about NIU before, I am amazed at how you have been able to manage before you had the current governance system. It has been a real pleasure to be part of a new era in the university’s history, Trustee Raymond continued, and to be part of addressing problems that have been around for quite a while and to establish new ways of addressing procedures. I suppose that is probably why you have such high quality people, because you have had to be so creative in addressing these issues over the years. It has been a real pleasure to be part of finding a new way of preparing the university for the future. As I was thinking about this being my last meeting, Trustee Raymond said, one of the things that I am going to miss is being part of a kind of a long-term strategic planning process that John La Tourette, Bob Boey and I have been talking about over the last year or so. One of the things that you will be doing as part of that process is looking at the university in the 21st Century and how to be prepared for that eventuality. You are soon going to be welcoming in the last incoming freshman class of this century. It is right here on top of us, Trustee Raymond said, and I hope that one of the things I have been able to do over the last couple of years with this Board is help prepare you for that venture into the new century.

Chair Boey announced that there would be a reception in the University Suite, immediately following this meeting, to honor Trustee David Raymond.

Just as David Raymond’s gift to the university expressed a commitment to the future of NIU, Chair Boey went on to say, so does Governor Edgar’s recent appointment of Gary Skoien to our Board of Trustees. Today, I have the pleasure of welcoming our newest member of the Board and hearing him take the oath of office. I just want to take a couple of minutes and acquaint you one more time with Mr. Skoien’s background, the Chair said. Gary is currently the chairman and CEO of Horizon Group Properties of Chicago. He served eight years, from 1983 to 1991, as executive director of Illinois’ Capital Development Board, the agency responsible for overseeing major public construction projects, including those at Illinois colleges and universities. In 1991, Mr. Skoien left the CDB to become executive vice president and chief operating officer of the Prime Group Development Corporation and continued to serve as a CDB Board member for another two years. Earlier this summer, Gary took his current position at the helm of Horizon Group Properties, a spin-off company of the Prime Group. President La Tourette said he looked forward to working with Mr. Skoien and said he was very pleased with the Governor’s selection. He mentioned that a web page on the Internet states that Mr. Skoien is a very active member of his college alumni association and has attended every Homecoming at Colgate University since 1976 when he graduated. He also attended the University of Michigan and received a Master of Public Policy degree at Colgate. President La Tourette said that Mr. Skoien is involved with the project at the corner of I-90 and Illinois 47 through the Prime Group, which is the developer responsible for the outlet mall on the northeast corner. The Prime Group is also working with other companies to complete a project on the northwest corner. The president welcomed Mr. Skoien to the university and said the university community really appreciated his willingness to be an active member of our Board of Trustees.

Chair Boey asked Trustee Susan Grans, Secretary of the Board, to administer the oath of office to Mr. Skoien. Mr. Skoien took the following oath:

Mr. Skoien said that, as President La Tourette had pointed out, he had been fortunate enough to attend two fine educational institutions. Whatever successes I have had in life, in addition to my family, he said, have been a result of the great education I was fortunate enough to receive. I am deeply honored to have the opportunity to be associated with another fine educational institution and look forward to making what I hope will be a significant contribution to the Board. I will know I have been successful on the Board if I can receive a standing ovation at the end of my tenure here like the one Trustee Raymond just received, Mr. Skoien said. That is pretty much what it is all about because it is a sign that a great contribution was made, and I will try to match that record. I have had a warm welcome from the Chair, the President and other Board members and an opportunity to spend time with the staff. I am very impressed with what I have seen so far and have a lot to learn, Mr. Skoien said.

Trustee Siegel thanked Trustee Raymond for the honor and pleasure of serving with him on this Board. You leave a lasting legacy to NIU, Trustee Siegel said. Moreover, you have given NIU the most important gift of your time and advice. Trustee Siegel mentioned that Trustee Raymond had also served on the Board of Visitors for NIU's College of Law prior to becoming a member of the Board. As a former NIU undergraduate and graduate student, a faculty member, the first chair of this Board, and your colleague, Trustee Siegel said, I thank you for your priceless contributions to NIU and wish you and your family happiness and success in your new endeavors. Trustee Siegel also welcomed Mr. Skoien to the Board.

Chair Boey announced that there would be a reception in the University Suite to honor Trustee David Raymond immediately following the adjournment of this meeting. He then asked for a motion to adjourn. Trustee Siegel so moved, seconded by Trustee Grans. The motion was approved.

The meeting was adjourned at 3:03 p.m.
  
Respectfully submitted,
 
Sharon M. Mimms
Recording Secretary