Minutes of the NIU Board of Trustees
Finance, Facilities and Operations Committee

March 2, 2000

The meeting was called to order by Chair Manuel Sanchez at 10:22 a.m. in the Regency Room at Northern Illinois University. Members present were Trustee Robert Boey and Chair Sanchez. Also present were Committee Liaison Eddie Williams, President John La Tourette and Parliamentarian Kenneth Davidson. Not present were Trustees Jeremiah Joyce, Gary Skoien and Barbara Giorgi Vella.

Chair Sanchez stated that Trustees Joyce and Skoien were out of town, and Trustee Vella was in court in Winnebago County. Due to the lack of a quorum, Chair Sanchez announced that the Committee members present would discuss all of the agenda items as informational and ask that they be carried forward, with any recommendations or clarifications from this meeting, for consideration and approval by the Board of Trustees at its March 23 meeting. If Trustee Vella joins us in time, the Chair added, we will take action on those items so designated. The Board is authorized to consider information presented by the administration as it would in a regular meeting. However, all of those items designated for action should be presented for consideration and action at the next meeting of the full Board of Trustees.

Chair Sanchez then asked Dr. Eddie Williams to begin with the information items listed under University Reports, after which the action items would, in the absence of a quorum, also be covered as informational.

Agenda Item 7.b. - Periodic Summary Report of Transactions in Excess of $100,000
Board Regulations require a periodic summary of transactions in excess of $100,000. This Regulation authorizes all transactions from $100,000 up to $250,000 to be approved by the President. These projects have been approved by the President, Dr. Williams said, and many are already underway.

Major Capital Construction Project Updates
Agenda Item 7.c.(1) – Altgeld Hall Renovation Update
The state of Illinois has appropriated approximately $19 million in support of the full and complete renovation of Altgeld Hall. Part of that included a major asbestos abatement project, which has been estimated to require as much as $3 to $4 million. We have already begun to experience what normally can happen when you renovate a building that is approximately a hundred years old, Dr. Williams said. Some of the walls, for example, that we had assumed were load-bearing walls, have been found to have vertical tunnels in them. Certain ceilings and roof materials are in much worse shape than had been anticipated, to the point that they are not stable and cannot accommodate the duct work and other things that would have to be hung from those ceilings and roofs. So, we are very concerned about these structural elements as well as the mechanical systems and a number of potential unknown conditions as we move more into this project. The budget for the project includes a contingency. The specific items just identified can be covered through that contingency at this point, Dr. Williams said, but we have been warned by the contractors and by the architects and engineers on the job that there are number of other conditions that are potential problems that would have a major impact on the budget. Pursuant to this, we have entered into a contract with Turner Construction Company to serve as a consultant and advisor to the university on this project, given the complexity and the different options and potential cost overruns that we face. We feel that this is a very good investment of university resources, he said, and should return many dollars in savings as we move on with the project.

The CDB has also been notified of the problem, and we have indicated that this matter is indeed very serious and requires their immediate attention. I am pleased to report that the CDB has assigned some of their best people to work on this with the institution, Dr. Williams said. A change order process has been put in place, and change orders from the architect, the contractors, or whoever is involved will be processed through the vice president’s office and then sent to the CDB. This gives the university another level of review and evaluation of these change orders as they come to the surface. Even with these measures in place, he said, the Board should be very aware that this item may come back due to some major cost overruns. 

Agenda Item 7.c.(2) – Campus Child Care Center Construction Project Update
Dr. Williams reported that the project is moving very successfully. We are pleased with the work of the architect, he said, and even more pleased with the work of the contractors. The project budget has been maintained throughout. It looks like the project will be delivered on time and within budget. We are very pleased with this outcome. This is one of the university's major efforts in the West Campus renovation program.

Agenda Item 7.c.(3) – Northern Illinois University-Naperville Construction Project Update
NIU-Naperville is an approximately 113,000 square foot facility. We used a creative financing tool for this project, Dr. Williams said, along with a creative developmental structure that allowed us to have a developer/contractor/architect-engineering team actually do all of the work from inception to occupancy. NIU staff is involved since this is not a CDB project. It is on schedule and within budget. The Business and Industry Services unit will move in during May, and space will be available for limited class use by July 1 and for full use by the fall semester.

Trustee Boey asked Dr. Williams to provide an update on the estimated convocation center schedule since there seems some confusion about it. Dr. Williams stated that the Board of Trustees had approved the project and the project budget at approximately $37 million. Subsequently, the university entered into an agreement with a developer team consisting of Turner Construction, Epstein as architects and the Prime Group as developer. This, again, is sort of a unique approach. They did not start from ground zero. We had a concept, we had a program statement and, because of that, Dr. Williams said, the development has gone very well. We are in the midst of completing the initial design. Construction drawings have also been initiated. Our original objective was to have the facility completed by the fall of 2001. At this point, that date is around November or December, he said, and we are planning for completion by January 2002. The project is moving very well and is very much on schedule. Bidding will begin in May. We might be breaking ground in June or July, Dr. Williams said.

I would like to announce in conjunction with the work being done in Naperville, President La Tourette said, and in the expectation that the building will be available in early July, that we will be offering two or three courses from our College of Law at that location this summer. This will meet some special needs for continuing legal education in the Naperville area as well as provide the opportunity for either NIU students or other students from other law schools who are clerking during that period of time to take these courses. We want to clearly indicate as quickly as possible to the Naperville area that there is an NIU presence, he said, and this is a very good way of beginning it. Dr. Williams has assured us that the part of the building needed for the law program will be available for these classes in July and August. This a good thing not only for the university, but for legal education and for students who are home for the summer in the area.

Dr. Waldeland said that it is not their intent to offer the entire program. First year students in law a take set group of courses. Then, for their second and third years, they can take a wide range of electives. We are going to make elective courses available both to help students make faster progress on their degrees, and also, perhaps, to hit some interest areas that might be of use to practicing attorneys. In order to offer a set of maybe three or four courses at the most, the university has had to get preliminary approval from the American Bar Association. The Association will have to make a site visit even this summer to assure itself that we are doing this according to their expectations, she said. It is a big step to do even part of a law program at an off-campus site.

President La Tourette noted that we have been reassured about this issue in that we are now in the fourth or fifth year of offering a summer program in conjunction with the University of Bordeaux-Montesquieu, Number 4, at their off-campus site in Agen, France. That program required special ABA approval as well as a site visit, and it has gone extremely well.

Living in DuPage County, Chair Sanchez said, I can tell you I have a special pride with respect to that facility. Little did I expect that one of the first educational pieces that would come into play would be the Law School. I think it is really terrific and that it bespeaks the kind of creative advanced thinking going on at this university.

Agenda Item 7.d. – Fiscal Year 2001 Operations and Grants Budget Recommendation Update
This item provided a recap of the fiscal 2001 budget recommendations brought to the Board of Trustees earlier this year. These have gone on to the Board of Higher Education, which has sent them on to the Governor and to the legislature. In a brief overview, Dr. Williams stated that the IBHE recommendations included a 3% salary increase, a 5% library increase and dollars set aside to deal with programs and priorities of the institution. One priority the university has been emphasizing over the years is the recruitment and retention of critical faculty and staff. In accordance with that, the budget that has been approved through the IBHE to include not only the 3% base salary increase, he said, but also a "1+1" percentage increase to be used for recruitment and retention of critical faculty and staff. The state general revenue fund is providing one percent, and the other one percent must be matched through the university's income fund resources.

The original request of the Board of Trustees was pared down by the Board of Higher Education. The good news, Dr. Williams said, is that the Governor has concurred with the IBHE recommendations and did not make any modifications related to higher education, so that the IBHE budget has been maintained. On Tuesday, March 21, we appeared before the Senate Appropriations Committee in regard to the fiscal 2001 budget. This was a very interesting session because we were very concerned about how the lump sum appropriation would be used and how we would be queried on that issue as well as the response we have made in trying to address statewide priorities, which basically included deferred maintenance, as indicated by the Senate. The good news is, he said, that we passed the first test regarding lump sum. In fact, the committee congratulated the institution on its ability to respond to statewide priorities as we see them. We were very diligent in our stewardship of the state funds, he said, which enabled us to identify in very clear and distinct terms where the base budget was and where all incremental dollars included in the FY00 budget were allocated. The university has many challenges ahead. The Senate has focused on several key concerns, including accountability, efficiency and assessment. They are looking for a proactive response to queries about faculty loads and faculty assignments and what savings could be generated by modifying those numbers and then directing those savings toward other university priorities such as deferred maintenance. But the good news is, again, Dr. Williams said, that we passed this test, and I assume there will be others. We do not know what the Senate’s final action will be on the budget recommendations, but we do know that through the President’s efforts we were received in a very positive light. House Appropriations Committee hearings had not yet been held.

On the salary increment, President La Tourette said, the legislature is very interested in the use of the extra two percent. Many of the other universities were queried on how they allocated the funding that was made available for this year, which was basically a three percent base package plus one percentage point to be devoted to critical faculty and staff with an additional one percentage point coming from the university as a match. They expect us to clearly identify those people who are making major contributions to the university. They are concerned about teaching and the quality of teaching. They are also interested in public service and research. The President thought the university would again receive very strong guidance from the Senate that perhaps no more than about 30 percent of the faculty and staff should be eligible for this extra two percentage point allocation. They are interested in where these dollars are going, what kind of impact these dollars have on the university's teaching, research and public service mission. In effect, they want the universities to demonstrate that these dollars were used in the best possible way to reward those faculty and staff who are making the greatest contribution to the mission of the university. NIU was prepared to answer that question. We do have a lot of information at the college level indicating that the funds were distributed in a selective way to people with very high merit, the President said. So, I underline that for the campus we are not talking about a five percent salary increase, but a three percent salary increase based on normal merit and a two percentage point increase based on extraordinary merit.

Also, deferred maintenance is an issue that has received a very high level of attention in the Senate, particularly from Senator Rauschenberger, the chair of the committee. I think we have done well, President La Tourette said, because in dealing with the budget allocated by the legislature in a lump sum, we did take special pains to increment our deferred maintenance funds as much as possible without detracting from some of our other needs. I believe the Senate is becoming much more sophisticated about this issue. In the course of an exchange with the University of Illinois, Senator Maitland, who is from the Illinois State University area, indicated that a number of the things the universities talk about relative to deferred maintenance really should be capital projects; and what they are really talking about is putting more effort into capital renewal of existing buildings as opposed to constructing new buildings. On this score, the President said, I tried to make the point in our testimony that we have found that many of the things we do to introduce new technology involve capital renewal or deferred maintenance. For example, when installing a smart classroom, in some cases, about half of the expenditures incurred deal with rewiring, new acoustic materials, audio equipment and so forth, all of which are necessary to bring that particular part of the building up to date for use as a smart classroom.

President La Tourette went on to say that these are two themes we have to be very concerned about, not only in terms of presenting our case to the legislature but also in being accountable for what we do with the new dollars. Legislative staff track the new dollars very closely to see what we do with them and whether or not they are going for the major priorities as they sense them to be either from us or the Board of Higher Education or through their own sense of the universities. They were generally pleased to find that most of the universities are getting to a point where we can say that the deferred maintenance is not growing. But, still, many of the schools have very large deferred maintenance needs. The University of Illinois is between $400 and $500 million. The estimate for NIU is about $70 million for the academic area. This is a major issue that the legislature is going to continue to address. We have to keep a balance between deferred maintenance for our physical plant and deferred capital in terms of our faculty and staff salaries and the need to continue to recruit and retain critical faculty. Over all, President La Tourette said, I think we will be treated very well by the Senate, but I would expect that, given past experiences, the budget increase will be trimmed here or there if there is an the opportunity. So, we start with a pretty good budget increase being recommended, but I think we have to go through the whole legislative process to see how we come out on it. Just to give you a sense of the level of detail the Senate looks at, they are examining how frequently we replace automobiles and trucks with the idea that most of these vehicles should be used for a hundred thousand miles unless there is some other good reason to replace them before that time. Many of our trucks are used on campus. They get to be about ten years old and are falling apart after 40,000 or 50,000 miles because they are always moving around the campus. So the mileage indicator is not always the best indicator of the need for replacement. I would rather focus on what the cost is per mile of delivering that transportation, the President said, and I think we do a very good job. I would like to compliment Bill Finucane, our Manager of Transportation. NIU delivers mileage at about 24˘ per mile compared to the state reimbursement rate of 32˘, but I think this is a good measure of productivity. It is amazing how much detail they go into and how many items are of interest to them. It is a very close scrutiny, he concluded, and we are expected to have accountability in all areas, as Dr. Williams has indicated.

I would like to add, Chair Sanchez said, that there is no doubt in my mind that the reason we have the legislative successes we have had is because of the relationships and credibility that President La Tourette and Dr. Williams have established in Springfield. And you can multiply that when you go to Washington. If you do not have the kind of credibility that this institution has, and the kind of rapport Dr. Williams and Dr. La Tourette have in Springfield, a lot of these things that they are scrutinizing would not be on the table for scrutiny because they would not be available to us. That is just an indirect way of complimenting the two of you on your activities on Tuesday, the Chair said.

Agenda item 7.e. – Periodic Report on Investments
The institution is proud of its stewardship of resources, Dr. Williams said, both state and local revenues. We cannot overstate the importance of retaining the income fund and what that does for the institution. The university received an average annualized rate of return of about 5.3 percent on investments. Dr. Williams stated that this was excellent result in view of the constraints under which the university must invest resources. Chair Sanchez asked Dr. Williams to brief the Board on the strict limitations for investing university funds. Dr. Williams stated that the university is not allowed to invest any resources in the stock market or any really volatile equity-type situation. We are required to work under the State’s investment policies, a state statute that limits our investments to things like certificates of deposit and U.S. Government investments, such as arms and things of that nature. Where we can place our dollars is very limited, and that limits what we receive in returns. There is an Illinois fund in which many state agencies deposit their dollars. I am pleased to say that we have done better than the state fund in returns, Dr. Williams said. 

Agenda Item 6.b. – Fiscal Year 2001 Student Fee Recommendations
The Student Fee Recommendations would have been changed to an information item since it had not yet been possible to meet with the student leadership. Our normal process for establishing fee recommendations for the coming fiscal year, Dr. Williams explained, includes the president identifying fee review teams consisting of staff, and sometimes faculty, and, in all cases, students, to review each fee area, evaluate all needs and requests and prepare a recommendation to be considered by the President. This year, that process went along very smoothly and each review team made its report. In addition to that, our process requires that the reports be evaluated through Finance and Planning and that the President and the Senior Vice President meet with the student leadership to discuss the details of the fee recommendations. Based on student input, the President then recommends the increases to the Committee and then to the Board. Because of conflicting schedules and the demands placed on us due to the fact that the appropriation process was moved up this year and occurred right in the middle of our fee review process, he said, we have not yet had the meeting between the President, the Senior Vice President and the student leadership. That meeting will occur in the following week or so. The item in the meeting materials reflected the results of the fee review team’s efforts.

Chair Sanchez emphasized that no action would be taken by the Board on very significant issues like student fee increases without first meeting with the student leadership. It had already been decided before the quorum issue arose that this matter would be treated as an informational item. Even with a full quorum, we would not have treated this as an action item today.

Dr. Williams said that these increases reflect an 8.16 percent increase. But in reviewing this, he said, one must look at the fact that $2.46 of the bond revenue fees that have been recommended were previously approved by the Board as part of a step increase in support of the bonds issued in Fiscal Years 1997 and 1999. Therefore, what is really being approved this year is a 4.11 percent increase over the previous year. A detailed table provided the specific recommendations for each of the fee areas. After meeting with the student leadership, the final fee recommendations will be presented at the full Board meeting on March 23.

Excluding the already approved $2.46, Chair Sanchez inquired how the 4.11 percent increase compared with the last four years that the Board of Trustees has been in existence. Dr. Williams stated that it is very consistent. The increase has probably run from 3 percent up to about 4.5 percent over the years. Many of our fee-supported areas have significant personnel lines, and those lines will have to reflect the "3+1+1 percent" salary increase appropriation that has been anticipated so that the funds necessary to cover those salary increases will be generated. Review and approval of Agenda Item 6.b., Fiscal Year 2001 Student Fee Recommendations, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.c. – Fiscal Year 2001 Room and Board Rate Recommendations
Dr. Williams stated that the university was requesting a 4.02 percent increase that applies to all residence halls, assuming the purchase of the minimum board plan buy-in. Also recommended was a 9.125 percent increase for the university apartments. These were formerly known as the married student housing. We are trying to generate sufficient resources to provide adequate maintenance and deferred maintenance, he said, and this increase brings us more in line with the true cost of operations.

Trustee Boey said he had heard and read that the Stevenson Tower renovation has been widely accepted as the thing to do and asked Michael Coakley, Executive Director of Student Housing and Dining Services, if he could confirm that statement. Mr. Coakley said that the last two towers in Stevenson opened last January and, again, have been very well received by students. The Towers are now at almost one hundred percent occupancy. Part of Grant was closed to move some students over there, he said, and the feedback we are getting from the students is incredible. We continue to hear from students, "Okay, when are you going to start Grant?" However, I know we have to wait until new bonds can be issued to do that. The students like the suites because they decrease the use of the bathroom facilities by lowering the numbers in the bathrooms, and they like the sense that they have more access to amenities and services. It is more in line with what students are seeing at other campuses. It has been well worth the renovation we have gone through, Mr. Coakley said, and the students are willing to pay the additional costs related to those renovations without any complaints. So many people were eating in the food lines at Stevenson that it was causing slowdowns. Service was modified in response to the students’ concerns, and they are very happy this semester. Trustee Boey asked how long it took to complete the renovation of the four towers. Mr. Coakley stated that from the time the master plan was done, it was probably a total of three and a half years all together before the four towers were completed. As much as it has done just to increase the quality of life on campus, Trustee Boey said, I think it is helping a great deal in terms of marketing to our potential customers. Mr. Coakley confirmed that by saying that both Admissions and Athletics were very pleased with what they expected to show prospective students.

Chair Sanchez asked if there was some reason, such as infrastructure, that Steven Towers was renovated before Grant Towers, since Grant is the older of the two. Mr. Coakley said that it was more the location because Stevenson is located the farthest west, and it was perceived as being even father away because of the parking lot configuration there. When I came here, Mr. Coakley said, one and a half towers in Stevenson were unoccupied. But the renovation of Stevenson plus the central park renovation through the master plan has made Stevenson feel closer to campus.

I toured Stevenson, Chair Sanchez said, and was very impressed at the amenities and the facilities and at the totally unrehearsed, unprompted reactions and feedback I was getting from the students. They are very pleased with it. It was a good team effort between the Finance and Facilities staff, Architectural Engineering, my staff and the students, Mr. Coakley said, and I think it came together very well.

One of the things that we have great difficulty in explaining in the Senate Appropriations Committee meetings, President La Tourette commented, is the rising cost of education. I think a lot of it is due to the fact that students are coming to college now with much higher expectations about living arrangements, recreation facilities and so forth. Mr. Coakley agreed with that statement. He said that when many of us went to school, we expected to share a double room. We arrived on campus with our belongings in one car along with our parents and maybe our siblings. Now, students show up with U-Haul trailers and all sorts of things. They are coming from homes where they have had private bathrooms and their own bedrooms. They expect that same level of amenity. For the first year, we try to pair freshmen with another student because we think that is an appropriate skill for them to learn, he said, but later, we want to be able to move them into other campus facilities where they can have more privacy to better meet their needs and not chase them off campus. Students also want computer hook-ups, cable television, better furniture, more residential furniture versus institutional furniture. Residential furniture does not last as along as institutional furniture, so it does drive up the cost. From the information I have received thus far, Mr. Coakley said, NIU still has the second lowest combined room and board rate in the Mid-American Conference. Review and approval of Agenda Item 6.c., Fiscal Year 2001 Room and Board Rate Recommendations, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.d. – Fiscal Year 2001 Off-Campus Delivery Fee
There has always been a differential for delivering the M.B.A. program off campus. All you have to do is listen to the radio or TV to know that the competition is very fierce, Dr. Williams said. Many institutions have developed M.B.A. programs, and they offer them in all sorts of ways. It is increasingly important for us here at Northern to offer a very competitive M.B.A. program. We already know the quality of our program is not at issue. Northern Illinois University's M.B.A. program is very highly regarded and nationally known. The problem is one of marketing and of providing easier access to the program. That requires resources, Dr. Williams said, and we have tried through the delivery fee to generate the dollars necessary to support this program. He pointed out that advertising in the Chicago Tribune might cost $4,000 to $5,000 for one or two appearances of a very small ad. Many of our competitors are taking out full-page ads and long radio commercials. The public is not well served if Northern does not present the option of a public education and a public M.B.A. degree, Dr. Williams said, a quality, affordable degree that would be competitive and would clearly exceed most everything else in the marketplace. Review and approval of Agenda Item 6.d., Fiscal Year 2001 Off-Campus Delivery Fee, was forwarded to the full Board for resolution at its March 23 meeting.

Chair Sanchez told of an experience he had recently in connection with advertising that "NIU works!" As some of you may know, he said, I have been featured in some of these ads. The last case I tried went to the jury for verdict on a Friday, and unbeknownst to me, in the insert of the Chicago Tribune was one of those ads, and it happened to have my picture on it. The jury was out for about five and a half hours, came back and my client won. As we were talking to the jurors after they had been discharged by the judge, a lady came up to me and said, "That was a great picture of you in today’s paper. My son is a senior in high school and thinking about NIU." I was bewildered and did not understand because I was trying to celebrate my victory. I did not know until I got home that night and looked at the Tribune that my photo was in it. But NIU does work, Chair Sanchez said, and I do agree that we have to be competitive. The public is not well served when a public university like Northern offers such a quality degree, Dr. Williams agreed, and the many fly-by-night operations out there attract people who end up missing the best degree they could possibly receive right here at NIU.

Agenda Item 6.e. — Fiscal Year 2001 NIU Foundation Professional Services Contract
The NIU Foundation contract is in accordance with the Auditor General's requirements that there be a separation between the university and the Foundation. Therefore, for over 20 years the university has entered into contractual agreements with the Foundation for professional fundraising services. This recommendation is an approximate 5 percent increase over last year. Many of these dollars are used to support personnel, Dr. Williams said, and, again, we are trying to address the "3+1+1" salary increase that we hope will be available through the appropriation process. Review and approval of Agenda Item 6.e., Fiscal Year 2001 NIU Foundation Professional Services Contract, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.f. — Fiscal Year 2001 Athletic Sports Camp - Housing and Meal Expenditure
Dr. Williams stated that this item is a passthrough that is looked at each year. It provides the mechanism to pay the housing and meal expenses for various sports camps that are made available primarily to high school students throughout the NIU region. Because it is a passthrough, no university or state dollars are involved. Review and approval of Agenda Item 6.f., Fiscal Year 2001 Athletic Sports Camp - Housing and Meal Expenditure, was forwarded to the full Board for resolution at its March 23 meeting.
Agenda Item 6.g. — Depository Account
Board Regulations state that the university must have Board approval in order to deposit funds in any bank. The main offices for NIU's Continuing Education program are located in downtown DeKalb at the corner of Third and Locust in the same building in which the LNB Bank is located. This would allow Continuing Education personnel to deposit their resources very conveniently simply by walking downstairs. The university will be asking Board approval of this additional depository account with LNB Bank. Review and approval of Agenda Item 6.g., Depository Account, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.h. — Document Services Copier and Controller System - FY01 Contract Renewal
This is a request for the renewal of a multiyear agreement for copier services. Dr. Williams said the university would request Board approval of the additional contract renewal, which is pursuant to prior year limits as well. Review and approval of Agenda Item 6.h., Document Services Copier and Controller System - FY01 Contract Renewal, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.i. — Student Accident and Sickness Insurance - FY01 Contract Renewal
This item was also included in the recommendations for fee increases. It is a request for a fee increase to support the health insurance contract the university provides to each student. With the approval of that fee increase, Dr. Williams said, we would then request the Board to approve the contract that is supported by those fees. This contract is developed through a joint committee of staff and students who look at services that we would like to have. The vendor's cost is based on the their evaluation of the claims history and trends at NIU. This is an extension of an existing agreement, he said, and is within the same budget parameters as prior years. 

President La Tourette commented that the health insurance fee increase was slightly higher, at 8.28 percent, than the university's average. But coupled with the Health Center fee, Dr. Williams said, it drops significantly. The 8.28 percent is pursuant to the conditions of the contract which allow the vendor to look at the previous year's claims history and trends in order to set the costs of the services. Each year the committee looks at the different services provided under the contract to try to reduce costs as much as possible. It also looks at the possibility of adding any additional services or coverages that might be important to our students. One other thing that should be noted regarding this contract is an exceptional provision that allows student coverage during the summer. Even though they are not registered as summer students or physically on campus, Dr. Williams said, their health insurance extends through the summer months. As a parent with two children who have completed degrees here at Northern, he said, that is a reassuring factor. Students can opt out of the health insurance program by providing evidence that they have equal coverage through a family plan or otherwise. It gives students the maximum option plus a solid program for insurance coverage. Review and approval of Agenda Item 6.i., Student Accident and Sickness Insurance - FY01 Contract Renewal, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.j. — Huskie Bus Contract – FY01 Contract Renewal
The Huskie Bus contract is a multiyear agreement and provides campus bus service. There are contract provisions which allow the vendor to look at fuel costs and the cost of adding or subtracting routes in order to best reflect actual costs and resource needs in support of the bus service. This contract is within the parameters established in the multiyear agreement that has been approved previously. The university will again request approval of the agreement renewal. Dr. Williams stated that the general fee increase was included in the previous student fee report. The fee in support of this contract was not increased because it could be accommodated through existing resources. Review and approval of Agenda Item 6.j., Huskie Bus Contract - FY01 Contract Renewal, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.k. — International Programs Division – Contracts Renewal
The International Programs contract is a complete passthrough that is seen each year. It authorizes NIU's International Programs Division to pay the necessary costs — room, board, tuition, administrative service, travel and any others costs involved — for students who enroll in International Programs. The monies come in through participant fees; no university resources or state funds are used in support of this authorization. Review and approval of Agenda Item 6.k., International Programs Division - Contracts Renewal, was forwarded to the full Board for resolution at its March 23 meeting.

Agenda Item 6.l. — Fiscal Year 2001 Salary Increment Allocation Guidelines
Referring back to my comments regarding the appropriation and where we stand with the Senate, Dr. Williams said, the bill as now drafted includes a three percent merit increase with an additional two percent for the retention of critical faculty and staff. How that total package, a three percent base with a two percent add-on, should apply to each employee category was outlined for hourly employees, supportive professional and regular faculty in the Board Report. Dr. Williams asked Mr. Steve Cunningham, Associate Vice President for Administration and Human Resources, to present this item which was also on the agenda for the Academic Affairs, Student Affairs and Personnel Committee later in the day.

Trustee Boey said his understanding was that the three percent was the regular increment that had been discussed previously, and the "1+1" or two percent increment was for critical faculty and staff. He then asked Mr. Cunningham to clarify exceptional merit versus long-term. To me, he said, they are two different things. Exceptional can be combined with long-term or longevity. But long-term does not necessarily include exceptional, and I want to be sure that we are clear on this. The two percent is for exceptional merit, which sometimes comes with long-term employment. But just because someone is here for 20 years does not mean that there is exceptional merit to go with those 20 years.

This year, Mr. Cunningham explained, the guidelines that have already been distributed to the campus and discussed with the Council of Deans and the vice presidents include a very clear delineation of a three percent component and an extra two percent component that involves long-term exceptional merit (as opposed to just looking at the merit during the previous year, which is often the case when the merit decisions are made), as well as growth in position responsibilities and other critical retention issues like salary compression and market issues. The guidelines are going out to the campus early to provide adequate time for the colleges and divisions to very carefully and deliberately make these decisions. They will have approximately a full two months to make these decisions, a longer timeframe than in the past. We are emphasizing a very careful process with this two percent component of the increment, he said, which I think will be well reflected in the outcomes. I state this, Trustee Boey said, because the Board of Trustees is very sensitive to the need to maintain quality and to make sure that we are meeting the competition. We certainly do not want it to become just a routine thing; rather, it is essential for this two percent to be used in the right area.

Northern has a very good record of emphasizing merit with salary increases, Mr. Cunningham stated, especially compared to other universities where it is often more of an across-the-board component. The "3+1+1" model is, therefore, well suited to the practices we have at Northern. And this year, especially, we are going to make certain that we emphasize that two percent component is separate from the three percent.

Dr. Waldeland said that she agreed with Trustee Boey. The word "long-term" is in there not to suggest that longevity would be the basis for the increment but to separate the two percent from the annual increment. The three percent increment decisions are made on the basis of the preceding calendar year. What we hope to use the additional two percent for is to make the kind of distinctions that you are talking about and that the Legislation, Audit and External Affairs Committee clearly gave us instructions on as reported earlier by President La Tourette and Senior Vice President Williams. They want to be sure that any extra money goes to those who are really the critical faculty and staff who make the margin of difference. We have the UCPC (University Council Personnel Committee) at the university-level, Dr. Waldeland said, which has approved the guidelines in the Board Report. They have been discussed with the Council of Deans, and the deans have been asked to talk with their faculty and senate committees and then come back with plans for how they will define and implement the two percent. They have been given guidelines suggesting that of the two percent, 1.5 percent must go to faculty who show exceptional merit as defined over a period of time. Then they can reserve up to .5 percent for other factors that might relate to salary impaction or other things that affect retention. Review and approval of Agenda Item 6.l., Fiscal Year 2001 Salary Increment Allocation Guidelines, was forwarded to the full Board for resolution at its March 23 meeting.

Chair Sanchez acknowledged the presence of Student Trustee Nolan Davis. At this point, he said, It does not appear that Trustee Vella is going to be able to join us; therefore, we will proceed to treat all of these as information items.

Far too often we do not do this, Dr. Williams said, and I wanted to take time to thank my staff. We went through many items today, action as well as informational items. But what one may not fully appreciate is the number of hours of staff time and staff effort that are necessary in order to put these things together and in order for me to sit here and quickly run through these very important items. I would like to identify our different project managers, all of our accountants, those people who are in the architectural engineering area, my associate vice presidents, my administrative assistant, Ms. Hendrix, and all of the others. Dr. Williams asked all those on the Finance and Facilities staff to stand and be recognized.

As the previous chair of the Finance and Facilities Committee, Trustee Boey said, I understand the tremendous amount of work that goes on behind the scenes. We have always kidded you that we know you are not that good and that you must have a great staff behind you to make you look that good. That is true, and I have also had the pleasure of meeting just about all of them. Thank you all again for all of your efforts.

This is a good example of how a word can have two meanings, Chair Sanchez commented. There is "appreciate" and there is "appreciate." It is accurate to say that I do not fully appreciate just how much time, effort and energy are required to not only put the materials together but also the organization and the structure to deal with this committee. But I do, with a capital "A," Appreciate the wonderful benefits that we, as Trustees and representatives of this university, receive as a result of the good work of Dr. Williams and his wonderful staff. So, from that standpoint, he said, I will say that I do very much appreciate it. And as I continue as chair of the committee, I think I will continue to grow in my appreciation of the time, effort and energy that go into it. That is to say that on behalf of the Board, and certainly as chair, thank you all for the wonderful job that you do. Not only do we personally benefit, but the university also does. Thank you for your leadership of this wonderful team, Eddie, because it really does make a difference, Chair Sanchez concluded. Trustee Boey said to Dr. Williams, thank you and your staff for making us look good on the Board of Trustees.

Chair Sanchez then moved for adjournment. Trustee Boey seconded the motion. The motion was approved. The meeting was adjourned at 11:40 a.m.

Respectfully submitted,

Sharon M. Mimms
Recording Secretary