Minutes of the
NIU Board of Trustees
FINANCE, FACILITIES AND OPERATIONS COMMITTEE
June 1, 1999

President La Tourette introduced Ms. Rena Cotsones, the Executive Director of Community Relations, who was formerly the Executive Vice President of the Rockford Chamber of Commerce. Rena is a person who has a lot of experience with many directions, he said, particularly with the Rockford Chamber of Commerce and the Council of One Hundred. She has served with the Medical School at the UI in Rockford and also with the College of Pharmacy at the UI in Chicago. She brings a very extensive background in community relations as well as fundraising and public relations. We are looking forward to Rena helping us engage ourselves with the communities that we serve, President La Tourette said, because, not only do we have a community base here in DeKalb, but we have growing communities in Rockford, along the I-90 corridor and the I-88 corridor. Now that we have three off-campus sites at Rockford, Hoffman Estates and Lorado-Taft and will be adding a fourth facility at Naperville, the President said, we need to really work more closely with the communities that we serve. 

Mr. Pace stated that about two years ago approval was given to begin the replacement of the university's financial systems. This was an approximately $3.1 million project, which would replace all of the financial systems on campus. The project had to be up and running by July 1 of this year because the current financial system was not Year 2000 compliant. Shortly after purchasing the software from a company called PeopleSoft, which is probably the most successful vendor of software to higher education institutions' financial, human resource and student systems, Mr. Pace said, we engaged a consulting firm, Business Information Technology, to assist us with that implementation.

This project has been quite successful because of the support of the executive staff, particularly Dr. Williams and Kathe Shinham. I do not believe we would be where we are right now, Mr. Pace continued, without Kathe's support in her area, and I appreciate her input and guidance immensely. Other people who have been involved in this project that have been essential to where we are at this point, he said, are Abby Chemers in Budget and Planning, June Bocklund and Victoria Peel in Accounting, Sue Doubler and Kathy Jones in the Procurement Services, and Kim Hensley and her staff in Academic Information Services, as well as Dave Gersic and others in Networking.

We began this massive project by setting up in what we sometimes refer to as the "war room," Mr. Pace said, where we sit down and work the system. We began by conducting what were called "fit sessions" where we actually sat down and walked through the software, panel by panel, feature by feature to see how the software functioned relative to how NIU does business. After that was completed for each module, which included general ledger, accounts payable, purchasing and accounts receivable billing, we then went through prototyping sessions, where we actually built the system. That lasted for several months. The main difference in this system than any other that this institution has ever implemented is, Mr. Pace said, it is primarily a functional user project because the functional people decide how the system is going to work and do the setup for the system.

We have worked on the project many months and finally began to go live in March of this year, Mr. Pace said, and paralleled the old GAS system with the March implementation of PeopleSoft. One of the significant things with this was a massive data entry effort because there was absolutely no way purchase orders could be converted from the old GAS system to PeopleSoft. Thousands of purchase orders had to be manually rekeyed into the PeopleSoft system. It was an effort that required many people, a lot of volunteers on campus and a lot of overtime, he said, and the purchasing area did a phenomenal job on this massive effort.

During March, some difficulties were experienced with the software as we used it in the production environment. However, staff worked many long hours, seven days a week to correct those problems. In fact, Mr. Pace said, we have closed March and April, and we will probably close May the end of the week.  We are live,  he said,  and we are before July 1.

One of the problems we had during April was producing vendor checks, Mr. Pace explained. With many complaints from vendors, we had to write manual checks to get those payments out. Those problems have been corrected. As of this meeting, vendor payments were about one week behind and travel voucher payments about three weeks behind.

We are distributing reports electronically via the web and have had a significant issue of performance as well as running across a major database bug in the generation of the reports, Mr. Pace continued. We have gotten around that database bug and are in the process of completing the reports. All of the March reports have been produced and delivered. The financial summary reports for April also have been produced and delivered. And, as of this meeting, the actual period detail reports had been produced and delivered. The obligations report for personal service dollars was in the process of being run.

This has been a massive technological change for the campus. We have gone to an automated deployment of software, Mr. Pace said. PeopleSoft installation, which is an approximate two-hour process per station, has been automated and can be delivered in about five minutes. If there is a problem on the user's workstation, the installation can be verified and a new copy delivered in five minutes. There is no need to go to every workstation with CD's or diskettes and spend weeks installing software. Everyone can make their own installations in five minutes. On-line forms have been implemented. Also a new version of PeopleSoft, the 7.0 release, was being installed even as the 6.0 release was being brought up. Mr. Pace said they plan to have the 7.0 release up by September. At this point, the asset management module was still being implemented and the implementation of the budget project costing modules will have to be delayed until the 7.5 release of PeopleSoft, which is scheduled for October.

The financial system is just one aspect of some things that need to happen in changing the university, Mr. Pace concluded, and we look forward at some point to the university having the opportunity to implement both the human resource and student systems as well in order to have an integrated information system available to the campus.

I want to thank Mr. Pace for his leadership in this massive undertaking that was placed on his shoulders, Dr. Williams said, which he has done a marvelous job of coordinating. There have been a lot of staff that have worked weekends and late hours, and they are still doing this to make sure that the implementation works properly. I do want to reiterate that NIU has become the leader in the state in the implementation of such a financial system, Dr. Williams said. Some of the schools have called NIU for advice, and one was completely bewildered and has abandoned the $11 million system they were pursuing. I think we have a lot to be proud of in our staff and their ability to implement and carry this project through, he said. It is not all done, but we are very close. We have run into a few problems, but through staff, Kathe Shinham, the accounting office, the purchasing office and Abby Chemers in my office, we are all working together on each of those problems to make sure they are resolved. So, again, Mr. Chair, I am pleased to report to you and to this Committee that the project has moved forward, Mr. Williams concluded, and it is, in my estimation, very successful. Chair Sanchez thanked both Dr. Williams and Mr. Pace for a job well done. I am sure there are many staff supporting you on that, he said, and my hat is off to them as well.

Agenda Item 6.b. - Work Order System Implementation Status Report
Dr. Williams said the work order system implementation is another software package and system that was felt to be very key to our operations. The work order system handles all of the improvements — remodeling requests, repair requests, and so forth — for the entire campus through our Physical Plant Office. Mr. Bob Albanese, who is Associate Vice President in Finance and Facilities, also serves as Director of the Physical Plant. The backlog of just handling the paperwork for requests and orders had come to the point where the existing system was overtaxed and could not handle the demand. Board approval was obtained on November 17, 1998 for a new system. That implementation has been very successful. We are not totally alive with this system, Dr. Williams reported, but we will be live as of July 1 of this year. Again, it shows the abilities, ingenuity, support and dedication of our staff to make the services that we provide the best that are possible. I want to thank Bob and all of his staff for their work and making sure that this was implemented properly, Dr. Williams said. This is another success story that we share with you today. In answer to a question from Chair Sanchez, Dr. Williams said that the timeline had been followed and the installation was on schedule.

Agenda Item 6.c. - Semiannual Progress Report of Active Capital Projects with a Budget Over $100,000
In accordance with Board policy, this item provided a semiannual progress report of capital projects with a budget over $100,000. It is a very extensive list, Dr. Williams said, reflective of the efforts on the part of the institution in support of this Board and this Committee to improve our campus facilities to the maximum extent with the resources we have available. All of the projects are at various stages of completion all the way from planning to actual occupancy. We are pleased to say that there are no projects that we feel have major problems, Dr. Williams said. We are moving forward, and I want to thank Jim Bryant and Patti Perkins for their leadership and their staff for taking over the management of these various projects.

Chair Sanchez commented that the various projects, covering major projects such as the Altgeld Hall renovation to Faraday to less substantial projects, demonstrates that there is no way NIU is satisfied to just let things stagnate. There is a lot going on that involves millions of dollars, he said, and I, for one, am glad to receive these reports as the Chair of this Committee and to see that we continue to be a very robust university community. Unless the infrastructure is maintained and improved, we do not stand to continue our status as one of the finest higher education institutions in the country.

Agenda Item 6.d. - Periodic Summary Report of Transactions
According to Board policy, Dr. Williams said, the President of the university is authorized to approve projects under $250,000. The university routinely reports transactions between $100,000 and $250,000 to the Board. This report included 12 items that were approved by the President, totaling $1.9 million.

Agenda Item 6.e. - Update on Fiscal Year 2000 Budget Report
Dr. Williams said he would give a simple report, and Ms. Kathy Swanson would give a more exhaustive report at the next Legislation, Audit and External Affairs Committee. The budget sent to the Governor was reviewed by the Senate Appropriations Committee. At that time, the Governor's budget was one of the best that we have seen in several years, he reported. It supported most, if not all, of the general requests that the Board of Higher Education had placed before the Governor. There was some reduction, but that reduction, when compared to previous years, still lead to one of the best budgets that higher education has seen in some time. The only action that occurred with NIU's operating budget at the legislative level occurred in the Senate where it was reduced by approximately $367,000 as a small cutback that the Senate felt was necessary to bring all of the appropriation requests more in line with their estimate of revenues for the coming fiscal year. Other schools had different reductions based on an evaluation by the Senate staff. From our perspective, Dr. Williams said, this was a very small adjustment. It did not seriously impact any of the programs or efforts that we wish to undertake as an institution as we face Fiscal Year 2000. The action of the Senate was approved by the House and now goes before the Governor. From that perspective, the news is good, Dr. Williams said. The salary increase request was protected through this. There were some issues on the exact format of the budget, whether it would be specific lines or not. This will be resolved as the budget moves through the Governor's level for approval. It was believed that the Governor would be taking action within the next sixty days.

Agenda Item 6.f. - Update on the Governor's Illinois FIRST Proposal
Dr. Williams said that Ms. Swanson would also report on this item at the next Legislation, Audit and External Affairs Committee meeting. Dr. Williams said the Governor's plan included a little over $12 billion for capital improvements throughout the state of Illinois. A lot of that was focused on highway, roadway and bridge repairs, and also education, primarily elementary and secondary. There were a number of other priorities that the Governor laid out in his plan. As a result, there were many discussions between the leadership of the legislature and the Governor on the final allocations of the $12 billion and exactly what sources of funds would be used to pay off the bonds that would be issued in support of the $12 billion. Those negotiations and discussions have not been made totally public. We do know that while some of the dollars have been specified for education, elementary and secondary, and for road improvements and so forth, Dr. Williams said, there are still areas that have not been totally delineated that are under the control of the Governor and the leadership of the House and Senate. Because of that, he said, we do not know at this point all the details of how the dollars are going to be allocated.

Agenda Item 6.g. - Federally Funded Police Positions
In 1994 President Clinton signed the Violent Crime Control and Law Enforcement Act which created a partnership between the federal government and local police jurisdictions to improve and increase the number of officers that would be available to a local jurisdiction. This community policing concept received support from the federal government. As a result of that, Dr. Williams reported, local municipalities and police jurisdictions could apply for a federal grant to support additional police officers under a 75:25 percent split, with the 75 percent coming from the federal grant. The position would be supported for three years at that level. At the end of the three-year term, the local jurisdiction would take over the full salary of the position.

Chief John Pickens submitted a request for a grant from the federal government to assist Northern Illinois University with its public safety office. We are understaffed, Dr. Williams said, and we want to make sure that the services offered through our public safety office are the best possible. There are many things we want to do in terms of community orientation and more involvement and participation with the general campus life. One of the programs that is being initiated provides public safety officers who are assigned to particular residence halls. There is also a bicycle patrol. There is an evening patrol and other types of activities, Dr. Williams said, to (a) make our campus safer, and (b) to involve our students and faculty and staff in a general program of public safety where they would know the officers involved.

As a result of the grant request in 1996, NIU received a grant of $150,000 to support two officers. The grant was applied for again in 1998 and the university received another grant of $150,000 for two more officers. And just recently, Dr. Williams said, we were notified that NIU had received a third grant for $150,000 for a total of $450,000. Two additional officers have already been hired, and one has been assigned to Douglas Hall. It is an excellent program, he said, and I wanted to alert you to the fact that because of this we are able to offer services like our student patrol and night escort service for students. Anyone, wherever they are on campus, who wishes to have an escort to their car or to their residence hall, needs only make one phone call and someone will be made available to escort them. The university also has its own van, called the Late Nite Ride Service. It provides a door-to-door escort service for students from Friday to Sunday from 2:00 a.m. to 6:00 a.m. and will pick them up if they are at a function and drive them back to their residence halls.

Chair Sanchez said that Chief Pickens should be commended for these efforts. That is almost a half million dollars that we would not otherwise have. And, more importantly, the personnel will remain as full-time police officers on the campus after the grant funding runs out. Therefore, the community and the students will be the beneficiaries of that additional police assistance. The more we can do to demonstrate that this campus is a safe one and that this community is committed to keeping it that way, the Chair said, the better off we will be as an institution in promulgating the fine academic services that we have here in DeKalb.

Agenda Item 6.h. - Pre-Tax, Qualified Parking Benefit
This item, presented to the Finance Committee as an information item, was an action item for the Academic Affairs, Student Affairs and Personnel Committee and was endorsed on June 2. Recently, Congress authorized pre-tax benefits for qualified transportation expenses, including the use of an employer's on-premises parking facilities. Here at NIU, the university charges a fee to staff for parking permits to park on the campus in the various lots. There are also reserved spaces, which include a special fee. Under this federal legislation, Internal Revenue Code Section 132, Dr. Williams said, the payment made for these permits would be tax exempt.

Agenda Item 7.b. - Holmes Student Center Café Renovation
This was a renovation project request to renovate the area that now houses McDonald's and several other commercial ventures. This area provides a place where students, primarily, can go to have meals and refreshments. They also use this area to study and meet with friends and colleagues. This effort really updates the area by improving the overall ambience, Dr. Williams said. Replying to a query from Student Trustee Sosnowski on whether student fees were the only funding source for this project, Dr. Williams said that the project was being funded through the university's bond revenue reserve. It consists of the monies that are built up through the revenues that come in, which include fees and other funding sources in the Student Center. Chair Sanchez asked for a motion to approve the Holmes Student Center Café renovation. Board Chair Boey so moved, seconded by Trustee Moser. The motion was approved.

Agenda Item 7.c. - International Programs Contract (Renewal) 
This is an annual request for contract renewal. Dr. Williams stated that this contract serves as a mechanism by which the university is authorized to expend dollars paid to the university by students who are going to be in international programs. When the students pay their money, it goes into a university account. This is not university money; it is a pass-through. However, in order for that money to be spent, International Programs must have Board approval to do so. Board Chair Sanchez asked for a motion to approve the International Programs contract renewal. Trustee Moser so moved, seconded by Board Chair Boey. The motion was approved.

Agenda Item 7.d. - Northern Star Printing and Delivery Service Contract
This is the first year of a new contract, with an additional option of two one-year renewal contracts used at the university's discretion. The base contract amount is calculated based on the number of issues and estimates of the size of the issues and represents a savings from FY99 of approximately 20%. The university requested Board of Trustees approval of $310,000 for the FY00 Northern Star Printing and Delivery Service contract. Chair Sanchez asked for a motion to approve the contract. Board Chair Boey so moved, seconded by Trustee Moser. The motion was approved.

Agenda Item 7.e. - Printing Services Equipment Lease
Printing Services desires to enter into a five-year lease program to replace three existing Docutech systems with two new high-speed systems offering greater range of production capabilities along with lower operational costs. The lease, which will include the equipment, service, maintenance and copy allowance of 1.9 million copies per month is based on a firm fixed price for the entire term. Copies in excess of the 1.9 million monthly level will be charged at $0.00351 each. This contract covers all of the copy machines and other equipment used through the Printing Services area and is consistent with the agreement the university has had in prior years. Chair Sanchez asked if the university had ever operated the printing services area on a for-profit basis or if it had always leased out. Dr. Williams said that the university has a charge-back system that covers some of the printing services. The decision was made on what would be the most cost-effective approach for delivering the service to the campus. Where the most cost-effective approach was for our own operation to do the work, Dr. Williams said, we have essentially done that. And where it was more cost-effective to contract out for it, we have done that. Chair Sanchez asked for a motion to approve the Printing Services equipment lease. Trustee Moser so moved, seconded by Board Chair Boey. The motion was approved.

Agenda Item 7.f. - Material Distribution Center - Miscellaneous Commodities, Parts and Services
This item covers the miscellaneous commodities, parts and services in the inventory of the university's Physical Plant area. These could be pipefittings, screws, nails and other equipment of that type. Basically, Dr. Williams said, we are just putting the necessary items in the stores area so that if our repair or crafts people need supplies, they are available. A wide range of supplies, including basic plumbing fittings, shop equipment and heating/AC systems are purchased from the recommended vendors. The expenditure authority requested is for the new orders based on FY00 bids. Chair Sanchez asked for a motion to approve the Material Distribution Center miscellaneous commodities, parts and services request. Trustee Moser so moved, seconded by Board Chair Boey. The motion was approved.

Agenda Item 7.g. - Physical Plant Recycling Services
A couple of years ago, the university moved to have recycling made a part of the Physical Plant operation. This item provides for the specialized containers and equipment required for personal and centralized collection. Approximately 30% of the funding is provided through state grants that require the university to use collection containers made from recyclable materials. Chair Sanchez asked for a motion to approve the Physical Plant recycling service request. Trustee Moser so moved, seconded by Board Chair Boey. The motion was approved.

Agenda Item 7.h. - North Central Regional Educational Laboratory - Naperville Facility Lease
One of the unique aspects of the Naperville facility, Dr. Williams said, is that we will have tenants. This item asked for the approval of the lease agreement between the university and the North Central Regional Educational Laboratory. They will occupy approximately 30,000 square feet of the new Naperville facility. This agreement provides for a $19.90 per square foot rental charge. The lease will actually begin on the completion of construction. In order for us to move forward, Dr. Williams said, we need to have our Board approve the general conditions of the lease agreement. This kind of lease was discussed when we were contemplating making the big move to Naperville, Chair Sanchez commented. It is really comforting to see that sometimes when you, in the abstract, talk about contingencies or essentials, that something like this lease, which was essential to the integrity of the whole project from a fiscal standpoint, comes to fruition. Chair Sanchez asked for a motion to approve the NCREL Naperville facility lease. Board Chair Boey so moved, seconded by Trustee Moser. The motion was approved. 

Agenda Item 7.i. - Stevenson Hall Renovation - Phase II - Furniture, Fixtures and Equipment
Pursuant to the Board's commitment and efforts to improve the campus environment, specifically in the West Campus area, Dr. Williams said, we are renovating Stevenson Hall. Phase I has been completed. When we initiated Phase II, it was reported to this Committee that we had a budget concern because to do all of the improvements on all of the floors would have impacted our equipment budget. It was decided through discussions with students, housing staff and the senior staff of the university to use our dollars to pursue all of the hard construction since the contractor and subcontractors were on-site and, then, as funds became available, pursue the purchase of equipment and furnishings. We are now asking the Board to approve a general budget for the furniture, fixtures and equipment for Stevenson, Dr. Williams said, with the understanding that they will be purchased through our equipment reserves and other resources as they become available. We anticipate being able to purchase all that is needed over the coming fiscal year so that all furnishings will be in place by the time Stevenson Towers South is ready for occupancy. Board Chair Boey commented that three to three and a half years ago, the Board decided that the residence halls and dining facilities needed to be renovated (1) for the purpose of retaining students on campus and to improve their campus life, and (2) for marketing and competitive reasons. This morning it was with great satisfaction that I saw on the front page of the Chicago Tribune that Indiana University announced a renovation of their residence and food halls for the purpose of increasing campus life quality and marketing. I am delighted, the Board Chair said, to see that some of our friendly rivals, three years later, share the same opinion we had. It is nice to know that we are doing the right thing on the right track. Chair Sanchez asked for a motion to approve the general budget for the purchase of furniture, fixtures and equipment for Stevenson Towers South. Trustee Moser so moved, seconded by Board Chair Boey. The motion was approved.

Agenda Item 7.j. - Fiscal Year 2000 Salary Increment Allocation Guidelines
The general salary increment allocation guidelines were established by the Board almost a year ago when the university submitted its budget request to the Board of Higher Education. That budget is now before the Governor for final signature. We are at the point now, Dr. Williams said, where we have to put in place exactly how the salary increment dollars will be allocated. The university has asked for a 5% general increment.

I want to emphasize, President La Tourette said, that the budget being presented to the Governor is very robust in the sense that it is the largest increase higher education is receiving in this decade. The increase for Northern Illinois University will be around 4.8% to 4.9%. Included in that package is a 5% average salary increment. The increment base is 3%, and the legislature has approved an additional 1% to improve our salary base. The 1% is matched by a university reallocation through funds that were set aside when we were dealing with our budget preparation for the year 2000. Recapturing the enrollment that was lost earlier in the 1990s, and based on the university's recruiting management system, funds have been identified to make the 1% match. I hope that this will contribute to an improvement of our salaries for faculty and staff in the coming year, President La Tourette said. We will treat each category of employment — the instructional faculty, including the department chairs; exempt employees, excluding the faculty; and regularly appointed civil service employees — as groups in administering this 5% average salary increase. In line with the university's merit system, these salary increments will be based on evaluations that have been carried out in the individual colleges for the faculty and among the operating and professional staff. That means there can be a spread of salary increments based on those merit evaluations. Overall, the adjustment is very favorable, the President said, and I believe this is the largest salary increment the state has supported as far back as Governor Thompson's administration. Chair Sanchez asked for a motion to approve the recommendation of the FY00 salary increment guidelines. Trustee Moser so moved, seconded by Board Chair Boey. The motion was approved.

Agenda Item 8.a. - Legislative Report
Dr. Williams stated that Kathy Swanson could not be at the meeting to give this report due to another commitment. This report will be part of the next Legislation, Audit and External Affairs Committee Meeting.

The meeting was adjourned at 11:14 a.m.

Respectfully submitted,

Sharon M. Mimms
Recording Secretary