Minutes of the
NIU Board of Trustees

It was moved by Trustee Grans and seconded by Board Chair Boey to approve the minutes of the April 14, 1998 meeting. The motion was approved. 

Chair Raymond announced the day’s agenda, including information on capital projects and an update on the status of new procurement regulations. He said this was the last Committee meeting of this fiscal year and the Committee would be reviewing transactions and approvals for Fiscal Years 1999 and 2000, including salary increment and budget guidelines, appropriated and nonappropriated capital budgets and other important business. Also coming before the Committee, Chair Raymond said, were an electrical easement and a lease-purchase contract related to the IASBO building and a modification to the tuition plan which could have a very positive effect on enrollment in the near future. The Chair recognized University Advisory Committee representatives Charles Larson and Andy Small. 
  

Committee Liaison Williams explained the semi-annual progress report on active capital projects that exceed $100,000. To give a perspective on the amount of work and effort that goes into maintaining a campus of this size, Dr. Williams said there were approximately 300 to 400 active projects on the campus at any one time. He commended those people who are involved in all aspects of these projects. This agenda item provides a status report on the major capital projects on campus, those handled through the Capital Development Board and those managed and operated by Northern Illinois University. Dr. Williams pointed to several projects with which the university was having difficulties. Among these were the Engineering Building and Faraday Hall. The appropriations for these projects were made to the Capital Development Board, and the projects are handled through that agency. All project management, including contracts with architects, engineers, contractors and subcontractors, is handled by the Capital Development Board. Dr. Williams told the Board that both projects have run into serious problems. The original general contractor for Faraday Hall went bankrupt in the middle of construction. Through fast action on the part of the university, he said, we averted having that project end up in bankruptcy court. However, this has left several construction matters to be completed. The same is true with the Engineering Building. There are major problems with the roof. Part of that construction was a clean room, costing approximately $3.5 million, that has turned out to be contaminated and unusable as a clean room. Dr. Williams reported that it did not look like the situation would be corrected any time soon. Problems with both buildings are due to contractor error and design architect engineering errors. The university has talked with CDB to try to get the projects back on track, but this has become very difficult because of pending litigation. 

Chair Boey asked if the university had any holdback money on the project. The corrective action necessary would be between $3 and $4.5 million, which would represent as much as 14 to 15 percent of the original project budget. Dr. Williams said the university did not have that kind of holdback. As has happened in many cases over the years, he said, the original contractors and subcontractors are beginning to file bankruptcy and disappear on us, and that makes it even more complicated. Board Chair Boey said he questioned why the Capital Development Board would release the money before completion of the project. Chair Raymond asked what process was in place to verify that all work had been done satisfactorily before payments are made. Dr. Williams stated that CDB has a field representative who is responsible for the sign-off. The university certainly tries to provide its opinion on these projects. At Faraday, the university recommended a 10 percent holdback, he said, but the CDB went beyond our recommendation and released the funds anyway. To answer a question from Chair Raymond, Dr. Williams said the problem had been identified previously. The contracts were made with the CDB, and it was their responsibility to correct the problems. 

President La Tourette said that litigation would be undertaken against the contractors and the design firm by the Capital Development Board in the case of the Engineering Building. This could take several years to settle, he said, given past experience dealing with the roof problem on the library. That took between 12 and 13 years to finally settle, and, in the interim, the university had to seek additional funding from the legislature to correct that roof problem. What the university will probably need to do, Dr. La Tourette said, is bring this, again, to the attention of the Illinois Board of Higher Education. They are aware of some of these problems, he said, and the university will probably need Board support to advance some capital projects through the legislature, either in the Veto Session or as part of the regular capital requests next spring for Fiscal Year, to get this corrected. To answer Chair Raymond, President La Tourette said that in the interim, the Engineering Building has a leaking roof problem and a clean room, a very substantial research facility which has been the backbone of the electrical engineering research efforts, that is unusable. Chair Boey asked if there was a way to at least modify the process used by the Capital Development Board so that the university had input into the CDB’s decision to release funds. Trustee Grans said that was her question. We have two more pages of CDB projects she said, and if this is an ongoing thing, the Board and the university should learn from the CDB’s mistakes and try to control the process more so that things ranging from preparation of construction documents to architectural services do not become runaway trains. Dr. Williams said the problem is one of jurisdiction and that jurisdiction comes through state statute, which makes it a very difficult issue. Dr. Williams said the university should try to identify procedural changes that we feel would assist us in maintaining the integrity of our projects, the time schedules and so forth, and see if we can get CDB to agree to allow some flexibility in those directions. Otherwise, he said, I think we will be looking for statutory relief to gain some control over the projects. Dr. Williams told Trustee Raymond that he thinks the CDB understands the issues, but they feel they are severely understaffed, having as many as 40 projects per person all over the state. In their defense, he said, there is just no way that the appropriate attention can be given to these kinds of matters. However, when we're dealing with a $30 million project, it deserves a lot of attention. 

From the university perspective, Dr. Williams said, I appreciate the comments of the Trustees and especially Trustee Grans. The university has tried to learn these lessons, and our projects are working well. Dr. Williams stated that the university is moving forward with the $16 million Stevenson Hall projects, which are on a very aggressive schedule. The project is still within the time schedule necessary for occupancy this fall. He also reported that work is underway for improvements in DuSable, one of NIU's main instructional classroom buildings, and that work should be completed by the fall semester. We are trying to learn our lessons and not make the same mistakes that we see, especially from the CDB, Dr. Williams said, and I think our record shows that we are doing a good job. Chair Raymond questioned the state's involvement in university transactions of lesser amounts required under the new procurement law, if they were unable to handle $30 million dollar projects. Dr. Williams said he thought there would be some opportunity to revise the procurement legislation through some type of modification that would make it more livable for higher education. 

Chair Raymond asked if there was anything the Board could do to raise the level of the state's attention to this issue. President La Tourette said they would be talking with the IBHE and CDB on what would appear to be a reasonable course of action, and the university would be back to ask support from the Board on that issue within a month or so. Chair Boey asked about the relationship between the Illinois Board of Higher Education and the Capital Development Board. President La Tourette said they have a working relationship only. The IBHE has the statutory responsibility of submitting requests for capital projects. The university can talk to the IBHE Executive Director about giving this a very high priority, either on any special capital project list developed between now and next spring or as a very high priority with the Fiscal Year 2000 Budget. Since Dr. Williams has said attorneys for the CDB are going to proceed with litigation, President La Tourette said, our only relief is in seeking additional funding from the state to fill in the gap left by the uncompleted projects. 

Agenda Item 6.b. – Periodic Summary Report of Transactions in Excess of $100,000 

Board policy gives the President authorization to approve projects under $250,000 and requires that the university report those projects that exceed $100,000 to the Board on a periodic basis. Seven projects totaling $1,044,663.25 were reported. 

Agenda Item 6.c. – Procurement Regulations Report 

This item was an update on the new procurement regulations. The public higher education community in the state of Illinois is working cooperatively to develop bylaws and procedures, Dr. Williams said, that will have us within the guidelines of the legislation and provide a practical way in which to operate. Formal documents should be completed in June, and there will be an update at the June Board meeting. 

Agenda Item 6.d. – Comprehensive Laundry Facilities – Residence Halls 

Dr. Williams said he wanted to update the Board on some of the unique types of contractual relationships the university is able to enter into that are cost effective for the university and are also beneficial to NIU students. Until now, laundry services were provided by the university. Through the RFP process, a vendor has been identified who will come in and provide all new equipment. The vendor will be responsible for all maintenance of that equipment and will also provide some minor remodeling in the laundry areas. One new aspect of this service is that students will be able to use the campus OneCard, which means they will not need cash. That should make their parents feel more comfortable as well. 

Agenda Item 6.e. – Work Order System Replacement  

Dr. Williams asked Mr. Bob Albanese, Acting Associate Vice President for Finance and Facilities, to give a report on a new software system that the university is seeking to upgrade its work order system. Mr. Albanese also gave a brief overview of the maintenance operation and how it relates to the work order system. 

NIU is situated on 514 acres of rural countryside in DeKalb, Illinois. Enrollment at NIU was 22,082 students for Fall 1997. In 1997, the building maintenance department was responsible for 87 buildings, 793 streetlights, 378 bathrooms, two swimming pools, 71 elevators and 8 escalators. The buildings and equipment had an insured value of $741 million. Recently it was reported that NIU had received $275,000 in deferred maintenance dollars as part of the FY99 budget. What that amounts to, Mr. Albanese said, is four hundredths of one percent (.04%) of the total asset value of the campus, and that is not a lot to work with to improve the campus. 

Our Maintenance Department, Mr. Albanese said, includes 79 full-time equivalent positions and a budget in excess of $16.7 million. Some of the crafts within the department include the carpenter shop, electrical, plumbing, energy conservation, refrigeration, mechanics, a mason shop, a paint shop, an elevator repair operation and a key control operation. What drives the day-to-day operation is the work order system. The work order defines the location of the work, details what is to be performed, allocates resources, authorizes and prioritizes the work and certifies completion of the job. In FY95, there were 16,310 jobs, and in FY97, there were 15,500. The decline is driven by the budget. When there are fewer dollars available, more maintenance projects are deferred, and no work orders are created. The total dollar value of all work orders processed through the system, including labor, materials and overhead for FY95 was approximately $6.5 million and almost $8 million for FY97. As a state agency, Mr. Albanese said, the university is required to pay union scale, which is the prevailing wage for the area. This translates to an average hourly rate of $25.74 for an NIU maintenance employee. In FY95, 161,742 hours were generated handling maintenance tasks, and in FY97, it was 168,171 hours. Another important component of the work order system is the inventory system. These transactions represent the issuance of parts and materials to support the overall maintenance effort. As a result of difficult budget years, the Maintenance operation is spending more time repairing than replacing things. In the short run, that is the way we can keep within our budget; but in the long run, it will drive up the cost of doing business, he said. 

To summarize, Mr. Albanese said that a loss of about three percent in productivity of the maintenance staff was estimated due to downtime of the work order system. Using the FY97 numbers, he said, this translates to about 5,000 manhours. Using the $25.74 per hour rate, it cost the university approximately 130,000 hours and $3,341,000 for a work order system that does not perform as needed. Mr. Albanese said this is unacceptable and makes the replacement of this system critical. Replacement of the system is also needed because it is designed to handle no more than 65,536 records and because of the Year 2000 requirement. 

A replacement system, Mr. Albanese said, should help us manage maintenance personnel and material inventory; use managerial information; improve services provided by more effectively managing data and projects; insure the accuracy, integrity and security of all data; automate work flow processes wherever possible; interact with the PeopleSoft Financial Information System; and facilitate the entry of a vast amount of data without increasing existing staff. We're also looking for a system that has full billing capabilities to internal departments and external customers. Lastly, Mr. Albanese said, we are looking for a system that gives us capacity to expand in the future to include a preventive maintenance model and a job estimation model. Chair Boey asked why job orders dropped from FY95 to FY97, but total dollars per job went up. Mr. Albanese said that was because the department is spending more labor hours and using more material to repair equipment instead of replacing it. Also, the nature of the work for that particular year dictates exactly how many job orders are created. 

Chair Raymond asked if there was a plan to identify the appropriate system in order to have something in place by the end of next year. Mr. Albanese said they are working with Steve Pace from the Finance and Facilities Office to prepare an RFP for the work order system. Based on that result, they hope to have someone program the system and have it up and running in a six-month to one-year timeframe at a cost of approximately half a million. He said the presentation to the Board on the RFP would probably be made in September. Dr. Williams said they are trying to work up a sound financial package for funding the project and will report back to the Committee with the details. Mr. Albanese introduced Paula Lofgren and Rich Klages, who were responsible for the graphics used in his presentation. 

Agenda Item 6.f. – Chlorofluorocarbon Reduction Initiative 

This item deals with the elimination of refrigerants that have been prohibited by law. The law affects the refrigerants used in air conditioning units throughout the campus. The CDB took the initiative to obtain monies from the state of Illinois to assist with the replacement of these refrigerants or systems for state agencies. Northern Illinois University was the recipient of approximately $900,000, and the funds were used to replace some of these refrigerants on campus. 
  

The NIU Board of Trustees will recommend a budget for Fiscal Year 2000 to the Board of Higher Education. The IBHE will review the budget in the fall of this year and then make specific recommendations to the Governor and the legislature on budget considerations for all of higher education. These are very preliminary figures that reflect as accurately as possible what NIU's needs are. Dr. Williams said the university has recommended a 5.5% faculty and staff salary increase; a 3% general price increase; 5% for fire protection; 10% for library and technology; $350,000 for the Medicare mandate; $4.6 million in program priorities; $3.45 million in nonacademic program improvements. Deferred maintenance, again, has been included. Dr. Williams said the university puts its needs on the table and then tries to convince the Board of Higher Education and the legislature to support those recommendations. Chair Boey noted that in FY99, the university asked for $330,000 for the mandated Medicare increase, but only received $25,900. President La Tourette said that in some years it has been funded, and in others it has not. The remainder of the funding comes off the top of the university's final budget allocation. Chair Raymond asked if the university thought it might be more successful with its request for deferred maintenance and computer systems next year than it had been this year. President La Tourette said more attention was placed on deferred maintenance in the legislative hearings, particularly in the Senate, and there was some discussion by some Senators to identify new funds or to reallocate funds that had been designated for other purposes within this budget for the deferred maintenance category. He said it did not appear that deferred maintenance had been included in the final negotiations for the budget package. In answer to a question from Board Chair Boey, President La Tourette said that the IBHE recommended $275,000 in this year's budget, whereas there had been no significant recommendations in previous years. Chair Raymond said he was concerned about the IBHE recommendation of $100,000 for Computer Systems when NIU's request was for $2,950 million, because the university's opportunity to purchase the Human Resource Information System at the quoted cost will expire at the end of next year. Dr. Williams said they have two years in which to make the system purchase at a fixed price, and the university is requested $1.9 million in the FY00 request. Chair Raymond asked if there was a backup system for Human Resources if the funding was not obtained. President La Tourette said they would have to look at some kind of loan situation, perhaps Certificates of Participation, over a reasonable amortization period. Also, some funds might be reallocated to use as an initial investment, making it necessary to borrow only what is actually needed to purchase and install the full system. Those are things that will be looked at and considered seriously, Dr. La Tourette said, as we approach this deadline on an agreed purchase price. 

Chair Raymond asked for a motion to endorse the Fiscal Year 2000 Budget Guidelines and recommend it to the full Board. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 7.b. – FY99 Salary Increment Allocation Guidelines 

Dr. Williams stated that this item is pursuant to Board Regulations and provides specific guidelines to be used to distribute the salary increase dollars that were a part of the appropriation that was just recently approved and, hopefully, will be signed by the Governor. He said the guidelines are much the same as the guidelines established last year except for the special consideration being given to clerical employees. 

President La Tourette said he would like to comment on the review that he and Dr. Williams had conducted of the budget, not only regarding the additional funds being provided by the legislature, but also current projections relative to next year's enrollment and other considerations. After the review, he said he would like to amend this document to indicate that the merit increase will be 3.2% rather than 3.0%. In addition, he noted that promotions scheduled for FY99 would take up about a hundred thousand dollars, but those funds would be in addition to the 3.2%. Looking at the average increase when promotions are included, Dr. La Tourette said, it would be a 3.4% increase for faculty and staff outside of those groups that are designated for special adjustments that the Board has already approved. In addition, we have been very concerned about the low level of some of our graduate student stipends and will provide some extra support to the Provost's Office to address selected situations there. Graduate students will receive a 3.0% increase, but the additional funds that will be allocated will probably bring that figure to a 3.3% or 3.4% average. There would be a pool of about $90,000 to adjust those situations where stipends are too low or where the university has strong competition in certain areas such as the recruitment of graduate assistants. 

To put this situation into perspective, Dr. La Tourette said, the university presented a summary of our salary increases from FY92 to FY97 to the legislature as part of the hearings process this year. The compound increase for all categories of employment was 29.1%. At the same time, the Consumer Price Index increased about 15%, and the increase in the Higher Education Price Index was just over 16%. Though the amount of increase and the percentage of increase varied from year to year, NIU has made some progress against the increases in the cost of living. Even though you note that the 29.1% compound increase is about twice the increase in the cost of living over that period of time, President La Tourette said, I would not say that we have caught up to where we should be. Across the board, and in some cases there are severe problems, we are below our comparable groups, the President said, whether we are talking about faculty being compared to national averages of public universities or to the Mid-American Conference or staff compared to salaries with code agencies at the state level in Illinois. We have made some progress relative to the cost-of-living increases. There has been some increase in real wages over this period of time, he said. However we are not where we need to be in order to compete in hiring and retaining faculty and staff. This percentage is based on a thorough analysis done by President La Tourette, Dr. Williams and staff, and in consultation with Mr. Steve Cunningham, Associate Vice President for Administration and Human Resources, on the categories of employees that would be adjusted and the percentage of people in each category that would be eligible for a salary increment from the monies that have been appropriated, as well as the university's current financial picture. Based on the above information, the President asked the Committee to amend this document to indicate that the increment would be 3.2%.  

There is an extra $750,000 that was specifically appropriated and justified by the gap in salaries for our clerical personnel. What is being administered is a 3.2% increase overall, plus the promotions and a special increment for the clerical staff, which has been discussed extensively with the Board and on campus. There are sufficient dollars above that for promotions and sufficient dollars for the pool that is being established to adjust graduate student stipends on a selective basis. Chair Raymond suggested that the line item titled "Salary Increase" be changed to "Salary Increase Pool" for more clarity. He recommended that the Committee adopt the 3.2% general merit increment amendment to the FY99 salary increment guidelines as described by the President.  

Chair Raymond asked for a motion to approve the amended guidelines. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 7.c. – FY99 Tuition Recommendation 

Dr. Williams described this item as a unique request on the part of the university for FY99 tuition. Historically, NIU's out-of-state tuition has been based on some multiple of the in-state rate to reflect the full cost of instruction. Several years ago the in-state rates accurately reflected about one-third of the total cost of instruction. It was very reasonable then to assume that the out-of-state tuition rate should be three times the in-state rate. However, what has happened over the course of the last ten years, he said, is that the in-state rate has increasingly become a higher percentage of the total cost of instruction because the state has not been able to fund the universities at previous levels. In-state tuition is now 43% to 45% of the full cost of instruction. What that means is that a 3:1 out-of-state rate is not justifiable and, in fact, requires that out-of-state students pay 129% to 130% of the full cost of instruction. Therefore, he said, we feel it is important to correct this problem by changing the ratio from 3:1 to 2.5:1. 

Reducing out-of-state rates will make NIU more attractive to our neighbors to the west and the north and to the east from the Indiana-Michigan area and should prove to be very instrumental in recruiting students. We feel this will assist us as we carry the NIU message outside of the state of Illinois. As you know, Dr. Williams said, Illinois is an exporter of students. A lot of our students leave this state and go to Iowa and Wisconsin, especially, for school. We feel that we can make some inroads into those markets if we can be a little more competitive with the tuition rates. The university will review this over the course of this year as we look at tuition rates for the coming year and will discuss the results in detail with the Board. 

President La Tourette said that there could be an initial reduction in revenues as a result of this decrease to the 2.5:1 ratio; however, there would be some other savings. Right now, he said, when the Foundation funds a student from out of state, the Foundation has to pay at the 3:1 ratio; so, in the future, the Foundation would only have to pay at the 2.5:1 ratio, which might allow them to stretch scholarship awards a little further. The Provost has also indicated that with a modest change in staffing, we can probably recruit effectively in the adjoining state areas. We have increased our recruiting in recent years and have been successful in the middle and southern parts of Illinois. We have more students now from south of interstate 80 than we have had in the last few years. One of the reasons I think it is important for us to do this is that the 8.5 million people north of Interstate 80 in Illinois and the students who live in that area are students that are recruited by everyone in the nation. For example, Northern Arizona University has two full orientation sessions for students recruited in northern Illinois in Chicago every year so they do not have to travel all the way to Flagstaff, Arizona for their freshman orientation. That is just one example of a school that would not normally be expected to have that kind of contact in the Chicago area. We know, President La Tourette said, that Wisconsin, Michigan, Iowa, Missouri, Indiana and all the major universities recruit very heavily in this region. We should be able to attract some students in adjoining states, just as they are attracting students from our primary service area. 

Chair Raymond called for a vote to approve the FY99 Tuition Recommendation. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved.  

Agenda Item 7.d. – Fiscal Year 2000 Appropriated Capital Budget 

Once approved by the Board, Dr. Williams said, this request will be submitted to the Board of Higher Education at which time it will become part of the statewide priority list. It would then go to the Governor, who would modify that statewide priority list and send it to the legislature for potential funding. The university has now received funds for the Altgeld Hall renovation project and the storm water project. All other projects on the list will now be moved up. Also included in the report was a list of six repair and renovation projects totaling $1,664,940. Chair Raymond called for a motion to approve the Fiscal Year 2000 appropriated capital budget. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 7.e. – FY99 Nonappropriated Capital Budget 

This item was a capital list for nonappropriated projects which does not have to be submitted to the Board of Higher Education and does not become part of a statewide priority list. Dr. Williams stated that these projects are funded through local funds, primarily in the bond revenue area. The bond revenue entity of the university, by bond covenants, is required to maintain a repair and replacement reserve. So much per year is placed into that reserve. That assures the bondholders that the property will be well maintained, Dr. Williams said, and that there are resources available and ready to undertake any needs in the repair and replacement area. Projects that would be covered are identified each year and usually amount to approximately $2 million. These projects are planned well in advance, and university reserves are adequate to cover them. There are several categories of smaller projects under $100,000 for remodeling, repairs, painting, etc. There were only three major projects on the list, but each project will receive the individual approval necessary to proceed. Chair Raymond called for a motion to approve the FY99 nonappropriated capital budget. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 7.f. – FY99 NIU Foundation Professional Services Contract 

This is a contract entered into by the university and the Foundation for fund raising services rendered for the university by the Foundation. Dr. Williams stated that the contract is required under financial guidelines. Chair Raymond asked for a motion to approve the FY99 NIU Foundation professional services contract. Board Chair Boey so moved, seconded by Trustee Grans. The motion was approved. 

Agenda Item 7.g. – Depository Account 

Board Regulations require the university to obtain Board approval to add a depository for funds collected by the university. This was a request to establish an account that would handle the university's OneCard debit program revenues at TCF Bank in Burr Ridge. It is easier on the Accounting area to have these funds in a separate account and not intermingled with other funds. In answer to a question from Board Chair Boey, Kathe Shinham said the account could eventually be over $100,000. If the account accumulates to that amount, the university will ask the bank to arrange additional security to protect access to the funds. Signature authority for wire transfers on this account would include Dr. Eddie Williams, Senior Vice President, Finance and Facilities; Ms. Tammy Farley, Director for Treasury Operations; and Ms. Kathe Shinham, Associate Vice President, Finance and Facilities. Ms. Shinham stated that aside from some predetermined wire transfers that limit the destination of wired funds, any transfers would require dual authorization. Chair Raymond asked that the item be amended for the full Board meeting to include the described signature authority for this depository account. Chair Raymond asked for a motion approving the opening of the depository account and the authorization of appropriate signature authority. Trustee Grans so moved as amended, seconded by board Chair Boey. The motion was approved. 

Agenda Item 7.h. – Printing Services Copier and Controller System 

This was the annual request for Printing Service copier and controller system multiyear one-year contracts that provide this service to the institution. The request is not to exceed $680,000. Dr. Williams said the provider for this service has not changed to answer an inquiry from Chair Raymond. Chair Raymond asked for a motion to approve the printing services copier and controller system contract request. Board Chair Boey made the motion, seconded by Trustee Grans. The motion was approved. 

Agenda Item 7.i. – Material Distribution Center Miscellaneous Commodities, Parts and Services 

This item covered a need for a ready inventory for such things as pipe fittings and other types of equipment needed by the maintenance area. Dr. Williams said an open order is normally provided through which these items can be purchased, and that allows the university to fast track the transactions. The university asked Board approval for a total amount not to exceed $700,000 with Columbia Pipe & Supply Co. in Aurora and Thrall Distribution in Loves Park. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 7.j. – Commonwealth Edison Easement Modification 

The Board previously approved an agreement with IASBO to construct a two-story, approximately 10,000 square foot to 14,000 square foot facility that would be shared by NIU and IASBO. During that construction, some power lines had to be relocated. Dr. Williams said the university asked Commonwealth Edison to eliminate the telephone lines along Carroll Avenue and move the lines underground. Therefore, this request was to allow the university to provide ComEd with an easement for their cable lines. Chair Raymond asked for a motion to approve the described Commonwealth Edison easement. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 7.k. – Illinois Association of School Business Officials (IASBO) Lease-Purchase Agreement 

This is the lease-purchase agreement between IASBO and Northern Illinois University. The original agreement provided that 5,250 square feet would be available to NIU at a cost of approximately $9.12 per square foot. After going through the design phase of the building, Dr. Williams said, there was an opportunity to do a little more excavation and provide a significant amount of additional space in the lower level of the building that would be invaluable to NIU in the near future. A review with the contractors, architects and cost estimators, showed that the university can get this additional space at a fraction of what it would ordinarily cost. It would be quality space in a high quality building. An agreement was reached on May 26 for 2,844 square feet of additional space in the lower level of the building that can be finished later. The university will also have an additional 310 square feet exclusively for computer laboratory space on the first floor. This space would cost approximately $6.99 a square foot. The agreement calls for the whole building to become the property of the university in 25 years. Dr. Williams said this item is not to exceed $30,000 a year based on a 6% amortization of additional dollars. Chair Raymond asked for a motion to approve the IASBO lease-purchase agreement. Board Chair Boey so moved, seconded by Trustee Grans. The motion was approved. 

Dr. Williams invited all of the Board members to a groundbreaking ceremony for this building being held on Friday, May 29, at 3:00 p.m. He said this is a unique ceremony because the university has not had many other joint agreements with an outside agency for the development of a building. This certainly is a milestone and a great precedent for us, Dr. Williams said. 

President La Tourette referred to an article from the Tuesday, May 26, Chicago Sun-Times, which referred to the tuition plan approved for NIU by the Board for implementation in FY99 as innovative and as a move that bucks the trend in tuition increases. They mention the fact that the university has introduced this decreasing tuition schedule so that each additional course a student takes costs the student less in order to encourage students to complete their degrees more quickly. President La Tourette said that the sample calculation for a 16-hour registration in the newspaper article showed NIU as the only institution with a decrease in tuition. There were some very large increases among the privates as well as some of the publics listed on the second page of the article. Dr. La Tourette said he also wanted to try to correct the misinterpretation of a student quoted in the article who said the new tuition plan penalizes students who cannot take 15 hours. That is not the case, he said, and it was not the intent. The plan is to encourage students to take more hours each semester so they can complete their education earlier, not to penalize students who do not finish in four years. Through the plan, it is hoped that students taking seven years now, might cut their time to six and a half, or the students taking five and a half years might cut it to five. It is a plan to benefit everyone who wants to take an extra course and try to finish a little earlier. President La Tourette said the plan would probably benefit between 10% to 15% of the students. This is an attempt to encourage students to understand the costs they are incurring by taking longer to graduate and to try to encourage them to reduce the time period, therefore, reducing the costs they incur to complete their education. The President thanked everyone, especially Dr. Charles Larson and the Board, who worked on this plan with him up to receiving a very strong endorsement from the University Council. Chair Raymond asked if it was likely that NIU's tuition plan would draw attention from the press throughout the country. President La Tourette said that one of Vice President Michael Malone's staff members had done an excellent job of briefing the two reporters who wrote this article and provided a lot of background information so they could understand the plan and compare it with others in the state. 
  

Capital funds received included $6.7 million for Phases II and III of the three-stage flood mitigation program which was begun in FY95. The total project cost was estimated at $9 million. NIU received an add-on to the budget of $450,000 for the "creation of an Equity Services Center to enhance the climate for workforce diversity and unity as well as public and employee perceptions of NIU as a positive and committed environment." These funds came from the legislature and were not part of the Governor's budget recommendations. That ties in with that $75,000 base budget increase for workforce development issues discussed earlier. As a part of the original higher education request last year, this Board approved a $595,000 request for this type of program. When it became clear that the Board of Higher Education could not approve that kind of funding, Ms. Swanson said, they approved $75,000 which establishes a base for that priority. The Equity Services Center will be a topic of discussion in the June 18 Legislation, Audit and Externals Affairs Committee. 

Ms. Swanson said that procurement reform was obviously a big issue that everyone focused a lot of attention on this session. The law created the establishment of a five-member policy board that has been named, but has not as yet convened. Ms. Swanson expected them to convene over the summer. 

Ms. Swanson said the university was able to negotiate a temporary solution to NIU's continuing education issues outside of the formal legislative process. Then we were able through that negotiation process, Ms. Swanson said, to gain legislative support for a permanent solution. The process for achieving that permanent solution will be to go through the policy board with legislative support and let the policy board recommend to the legislature, either during the fall Veto Session or next spring, the changes that NIU needs to see on a permanent basis, particularly in the continuing education area so the university can continue to operate those programs efficiently and effectively. Ms. Swanson said she felt fairly confident that these issues would be addressed within this fiscal year. She thanked Chair Boey for his participation in those negotiations and for personally stepping in to deal with some of the legislative leadership. Ms. Swanson said she would present a more detailed budget report and a substantive report at the Legislation, Audit and External Affairs Committee meeting scheduled for 10:30 a.m. on June 18. 

Ms. Swanson announced that as of last Thursday, May 21, the Governor appointed a new Chair and two new members to the Board of Higher Education. Mr. Jerry Blakemore, who has been a member of the board for a period of time and is a very strong advocate of higher education, has been appointed chair of the Board of Higher Education to replace Lieutenant Governor Kustra. Ms. Cordelia Meyer, vice president of the Civic Committee in Chicago and a graduate of Johns Hopkins, and Sam Gold of Urbana, the former director of the Institute for Government and Public Policy at the University of Illinois, have been appointed to serve out the remainder of this calendar year as public members of the Board of Higher Education. 

Chair Raymond asked if the decisions had been made on how the procurement infrastructure was going to be created for higher education. He also asked if the Chief Procurement Officer for higher education had been named. Ms. Swanson said that prior to the Policy Board being appointed, the vice president of business at the University of Illinois, Craig Bazzani, was appointed by the Governor as the Chief Procurement Officer for higher education. A Chief Procurement Officer has been named for each of the following agencies: the Capital Development Board, Central Management Services, Transportation and higher education. 

President La Tourette thanked Kathy Swanson for her extraordinary energy. She has not only a tremendous amount of energy, but also the ability to be extremely articulate and very persuasive with members of the legislature. I have seen her in operation on many occasions now, he said, and we really do have excellent representation in Springfield with Kathy and the backup that Craig Burkhart provides. The President also expressed his appreciation to the Board members, particularly Board Chair Boey because he was asked on numerous occasions to call the Governor's Office to talk to the staff or to the Governor. He also talked to other legislative people about NIU's budget recommendations and to maximize opportunities to negotiate changes in the procurement procedures. 
Board Chair Boey said he wanted to reinforce what President La Tourette said about Ms. Swanson and thanked her for a job well done. Time and time again when I talk to legislators, he said, they cannot say enough good things about her. 
  

The Chair asked for a motion to adjourn the meeting. Trustee Grans so moved, seconded by Board Chair Boey. The meeting was adjourned at 12:13 p.m. 
  
  
Respectfully submitted, 
  
Sharon M. Mimms 
Recording Secretary