Minutes of the

NIU Board of Trustees

FINANCE, FACILITIES AND OPERATIONS

COMMITTEE MEETING

March 7, 2002

CALL TO ORDER AND ROLL CALL

The meeting was called to order by Chair Robert Boey at approximately 10:15 a.m. in the Clara Sperling Sky Room of Holmes Student Center.  Recording Secretary Mimms conducted a roll call of Trustees.  Members present were Trustees Gary Skoien, Barbara Giorgi Vella and Chair Boey.  Not in attendance was Trustee George Moser.  Also present were Committee Liaison Eddie Williams, President John Peters and Parliamentarian Kenneth Davidson.

VERIFICATION OF APPROPRIATE NOTICE OF PUBLIC MEETING

Confirmation of Open Meetings Act notification compliance was given by Board Parliamentarian Ken Davidson.

MEETING AGENDA APPROVAL

Chair Boey reported that the committee had been given replacement pages for Agenda Items 7.b., room and board recommendations, and 7.d., tuition recommendations, and that Agenda Item 7.p., NIU Tax‑Deferred Compensation Plan Amendment, had been added.  And, Dr. Chair Boey asked for a motion to approve the agenda as amended.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

REVIEW AND APPROVAL OF MINUTES

It was moved by Trustee Skoien and seconded by Trustee Vella to approve the minutes of the November 15, 2001 meeting.  The motion was approved.

CHAIR'S COMMENTS/ANNOUNCEMENTS

Today’s agenda includes items of particular importance to the students and the university as a whole, Chair Boey said, including recommendation of tuition, fees, and room and board rates for the upcoming academic year.  These recommendations have been developed through a consultative process, and they reflect the budget reductions and the challenges that the university faces in Fiscal Year 2002‑03.  Additional items requiring Committee action include contract renewals for student insurance, sport camp accommodations, land easements, and capital projects and improvements.  The Committee will also receive financial reports including 2002 budget status, 2003 budget process update, transactions in excess of $100,000, report on investments and an update on the Engineering Building project.

Chair Boey then recognized University Advisory Committee representatives Jim Lockard and Sue Willis.  Dr. Willis said she would like to once again thank President Peters for his openness in discussing with the faculty and the entire university community the situation that we all face during these difficult budget times.  I do not know if you all know, but he sent out an e‑mail on Tuesday to the entire community – faculty, staff and students – which I do not believe anyone has ever done before, and I was certainly impressed by that.  I would not say it is a pleasure dealing with these issues, she said, but it is certainly a pleasure working with him.

We too are very pleased with the proactiveness that President Peter’s has taken, Chair Boey said.  We think it is extremely important in times like this that communication be the first priority.  It is better to communicate exactly what we are going through than to let rumors define for us what is happening.  President Peters has done a tremendous job in this very difficult time.

I really very much appreciate that, President Peters said, and I want to thank Sue for those comments.  There is no more important thing that our governing board does than set tuition and fee rates and make sure that the university is well managed.  I have been impressed with the reaction of our community to the crisis in which the university finds itself, that all universities in the state of Illinois find themselves in.  The state economic situation is not good, and we all must share in that.  We have put a plan in place to ensure our academic quality and access, while at the same time everyone will have to sacrifice.  If there is any solace in this, Dr. Peters said, it is that the economy is turning around, and we believe that things will be better.  The other thing that should make us all feel a little positive is that the State of Illinois and the public officials of the State of Illinois do not have to be convinced about the wisdom of investing in education.  So, we all have to hope that the economic forecasts are correct and that the economy turns around, because if the economy turns around, revenue will be up and the state will continue to invest in this institution and all the other public institutions in the state of Illinois.  I really do appreciate the fact that NIU is a well‑managed institution, it is a well‑governed institution, and it is an institution that is on the rise and making progress.  One of the things we have to be careful of is that we do not let this rather serious situation deter our aspirations.  We may not get there as quickly as we want, he said, but we should not use this as an excuse not to dream or move forward.  It is just going to be tougher, but we will get there.

I have always been a proponent of the mission of NIU, Chair Boey said, and the simplified mission of NIU is affordability, accessibility and quality.  In this case, as painful as it is, when we have to start making cuts and reductions, it needs to be in balance.  As a result, I understand the need to raise tuition to $125 per semester hour.  Certainly, President Peters has informed the members of the Board of Trustees and kept in close touch with us all the way.  I believe, John, that you have spoken to each one of us at least twice in recent days just on those matters, and we appreciate that.  And while we are increasing our tuition, the Chair said, we are not raising the room and board rates.  I think it is important, also, to understand the sensitivity with which we are trying to deal with this entire unfortunate situation.

PUBLIC COMMENT

The Chair asked Board Parliamentarian Kenneth Davidson if any members of the public had registered a written request to address the Board in accordance with state law and Board of Trustees Bylaws.  Mr. Davidson noted that no timely requests had been received for public comment at that Board meeting.

UNIVERSITY RECOMMENDATIONS

Agenda Item 7.a. – Fiscal Year 2003 Student Fee Recommendations

Our first item is student fees recommendations for Fiscal Year 2003, Dr. Williams said.  He briefly reviewed with the Board the procedure by which the university establishes fee recommendations.  That procedure includes specific fee committees that are comprised of students, staff and some of the administration.  The individual groups do an analysis, review all costs, all parts of the recommendation.  They then forward to the President a specific recommendation for that fee area.  Once received in the President’s Office, Finance and Planning works with the President to evaluate, review and place those recommendations in the larger context of what the institution faces in a given fiscal year.  This year, it has been quite an exercise given the problems with the state and the economy.  Our desire, as the President has directed us, is to minimize all costs and expenses to our students, Dr. Williams said.  Given those parameters, we work with the specific recommendations from the review teams, and we are very pleased to report to you the final recommendation package.  That package calls for a 4.74 percent increase in fees.  They are delineated on Table I attached to the fee recommendation.  Dr. Williams emphasized a couple of points regarding this recommendation.  The recommendation includes some fee requests related to the West Campus improvements that have already been preapproved by the Board in prior years.  And because of those preapproved fees, they had to be included in this recommendation.  Also included in this recommendation is a specific 9.84 percent increase in the health insurance contract, which provides necessary health insurance coverage for our students.  Our health insurance team reviewed all aspects of the contract.  Health insurance is escalating nationally.  And we were very pleased to see that in comparison to the 15 percent escalations that most insurance plans were receiving throughout the nation, he said, we were able to keep our plan at a 9.84 percent increase.  Dr. Williams recognized Ms. Regina Crosby, coordinator of the health insurance contract.  Factoring out the preapproved fees and the health insurance fee increase, the overall recommendation is for a 2.49 percent increase.  This reflects an effort on the part of all of our fee areas and our managers to cooperate and assist with the overall financial issues the university is facing.  We have reevaluated how we’re going to operate some of these fee areas in order to keep costs down to a minimum.  I want to thank all of the fee areas and those committees for cooperating, he said.  Mr. James Barr, who is an assistant in the finance office, worked on every fee committee and provided us with a way to address fee increases and to focus our increases on the bare necessities.  I need to also thank the students and our Student Trustee who diligently worked with us, not only participating on the particular committees, but also in the last part of this process which involved a meeting with the President and the student leaders.

Some of the students and I sat on many of these committees, Student Trustee Alaniz commented, and I wanted to let the Board know that it is a very intense process.  There are several stages that each fee goes through.  Most of the originally recommended fees were reduced during the process.  Though no increase is a good increase, they are needed.  Also, with the exception of the health insurance, the convocation center and the West Campus which are already fixed, I was extremely pleased with the increases that were recommended.

It is good for us to hear that it is a bottom up and a top down kind of process, that you are all involved in, Trustee Vella said, and that you can, representing the students, understand our dilemma here.  We are not doing this lightly but because it has to be done.

As I said last year, President Peters said, this is really a unique process and a model for other universities to emulate.  By the time the recommendations get to my office and I talk to the student leaders and others, the hard work has been done.  We wanted to create a bare bones set of increases this year, and that is what happened.  No report can do justice to the compromises and the discussions and the analysis that goes into this.  This is truly a very good process.  We always wish that these could be zero, but there are increased costs, and we do have to make progress.  But I am pleased to say that the university community does contribute to this.  By the time it gets to me, I am in the wonderful position of just asking for questions and information and asking if everyone is satisfied.  And everyone usually is, although I did cut the recommendations by a level.

Chair Boey asked for a motion to approve the FY03 Student Fee Recommendations.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 7.b. – Fiscal Year 2003 Room and Board Recommendations

We had to delay including the room and board recommendations in the package that was mailed to you, Dr. Williams said, because we were trying in every possible way to analyze costs and project food and operating costs for Fiscal Year 2003 in order to minimize these numbers.  What is before you is a recommendation that cuts more than half the original recommendation from the committee.  I want to thank Bob Albanese and Michael Coakley for their extra efforts in working with us to bring these costs and this recommendation down.  Dr. Williams recognized Alex Underwood, Chairman of the RHA, and student representative on the committee.  Some of the things the students wanted to do with the residence halls, we have asked again that they be delayed in order to keep the overall costs – fees and tuition – down for our students.  So we have a recommendation that meets our needs for what has to be done, not everything that, perhaps, should be done, but it certainly gets us through the fiscal year, he said.  As Chair Boey indicated earlier, the food part of this is a zero percent increase, so it balances out to a net three percent increase.

Trustee Vella asked Dr. Williams how other Illinois school room and board rates compared with NIU.  Dr. Williams stated that it is, again, a very positive thing to say about our room and board operations, our staff and our students.  When you look at the state of Illinois and all of the other public universities, Northern Illinois University has the lowest projected rate for room and board on a standard scale of any other state institution.  Those include the UI‑Chicago, Western, Southern, Illinois State, Eastern and so forth.  We have the lowest standard rate of all the schools.  In terms of projected increases for FY03, Northern Illinois University has the lowest rate by far of recommended increases for FY03.  This, again, gives an indication of the work that our staff is doing.  These rates do not reflect any less than any other school in the standards that we provide in terms of food or housing.  It is not a quality issue, he said, it is one of efficiency and administrative abilities that allow us to keep our rates at this level.  In comparing Northern Illinois University with the schools in the Mid‑America Conference – Buffalo, Ohio University, Ball State, Bowling Green, etc., Northern Illinois University, again, has the lowest room and board rates of all of the MAC schools on the standard scale.  And, other than the State University at Buffalo, which also has a three percent recommendation for Fiscal Year 2003, Northern has the lowest rate increase of any of the MAC schools going into FY03.  Our staff and students should be complimented for this record in terms of keeping costs down, Dr. Williams said.

When I compare the programs and services that we provide to those in Illinois and the MAC, Mr. Coakley said, we are one of the leaders, especially when it comes to our academic relationships in terms of the living and learning that we provide.  And our dining program is viewed across this country as being innovative relative to other school dining programs.  When I have the opportunity to represent NIU’s residence halls at different state, regional and national conferences, Mr. Underwood said, I talk to other students leaders about what we have to offer, and they are really impressed and even kind of jealous at times. So, I think we are doing real well.

Chair Boey asked for a motion to approve the FY03 room and board recommendations.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 7.c. – Regional Delivery Fees for Programs in Liberal Arts and Sciences

This item refers to off‑campus delivery fees for courses that are offered throughout this region by the College of Liberal Arts and Sciences.  Northern Illinois University has an excellent reputation for its off‑campus programs, Dr. Williams said, and we are moving into a new dimension in our outreach effort under the leadership of Dr. Peters.  In fact, Dr. Anne Kaplan, who is in charge of our outreach programs, tailored these specific requests in order that the offerings we make in the suburbs and in this region have sufficient financial support to enable the programs to go forward.  The specific recommendation before you this morning includes extending the current graduate $175 per credit hour fee that we charge for our graduate computer science courses to our undergraduate computer science courses, as well as initiating a $50 per credit hour fee for other off‑campus courses offered by the College of Liberal Arts and Sciences.  We have reviewed the impact of these fees in terms of our costs and have concluded that this is what is necessary to effectively deliver these courses.  Chair Boey asked for a motion to approve the regional delivery fees for programs in Liberal Arts and Sciences.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.d. – Fiscal Year 2003 Tuition Recommendation

This is the final recommendation we have as far as the student cost initiatives for Fiscal Year 2003, Dr. Williams said, and it is the one that we are not pleased to bring before you, but it is a necessity.  The recommendation of the university is for a $125 per semester increase on the full‑time undergraduate student tuition rate.  This, then, would be prorated to all of the other tuition rates for undergraduate, graduate and law students.  That $125 per semester increase, looked at in percentages, is about 8.75 percent.  Again, the President in both his news release and in his e‑mail to the campus has outlined the general rationale for this action.  It does not nearly cover the type of reductions and financial strategies the university has to meet in FY03, but it does go a long way and is a necessary piece of an overall funding strategy to meet the reductions and the requirements that the FY03 budget presents to the institution.

I want to thank Dr. Williams and his staff, President Peters said, for spending, literally in the past few months, weeks and days, hours and hours to come up with some options that would permit this university to maintain its quality, to move forward, and to deal with the very serious budget downturn the state has experienced.  On our base of $118 million state‑appropriated General Fund, we will have a net cash reduction of about $4 million in that budget.  So we are starting out in our adjusted budget with $4 million less.  Add to that the fact that the state has asked us to pick up certain costs for health insurance that heretofore have been provided by the state and that at a minimum, given our employee base, is $3.54 million.  That is not passed on to the individual employee; it is an institutional responsibility.  In our estimation and analysis, the issue of rising health care costs for state employees will be a major factor in Illinois budgeting in the next few years, and we are watching that very carefully.

In addition to that, the President said, because we have no new state money in the GR for uncontrollable costs – utility costs go up, the costs of security go up, the costs for bringing on new academic buildings, our liability insurance goes up significantly – and other contingencies means that we realistically have to plan for about a $9 to $10 million potential shortfall.  The legislature has not acted yet, but we must plan.  Therefore, we have put together a plan that asks the whole NIU community to share in the response to what we hope is a one‑year, maybe a two‑year downturn in our state funding.  Part of that response will be deep cuts in existing budgets across the campus, which we are working on now.  But, at the same time, we wanted a plan that did not provide for layoffs which begin to immediately affect the academic quality and the environmental quality of this institution.  We want to give students the programs they need to reasonably graduate on time.  So, part of that means an analysis of what reasonable share of the costs of an education students and their parents should bear.

I have had discussions with each of our Trustees on this issue and kept them fully informed as this calamity has unfolded, the President continued, and I have been impressed with two things.  Number one, they share with me, our administration and the whole community the fact that we have to keep our costs as low as possible so that access to this institution is available to all students who want to succeed at a place like NIU, which offers, dollar for dollar, one of the best values in higher education.  If you happen to have a son, like I do, who goes to a private institution, and you have to write the check – and I see others shaking their heads – you know what we are talking about.  So, we have come up with this recommendation and shaved it down to what we believe is the minimum we need to accomplish those goals – quality and access.  The recommendation is $125 a semester for a full‑time undergraduate and then pro rata for the lower loads and the graduate professional students.  We are not happy about this, but we think it is necessary.  We are still a good buy, President Peters said, but it will challenge students.  And I suppose when I think about it, maybe $250 for a full program is not too much to pay for a quality education.  I can argue that on the one hand.  On the other hand, I know, personally, from talking to many parents and students, what it takes to make their tuition, and they are worried about that.  So, with no pleasure, but with confidence that there will be a better day when we will be able to recommend very minimal, if any, tuition increases in the future, I support this recommendation.

Trustee Vella asked whether the current situation would affect student and academic services.  President Peters replied that there is always disruption in a cut of this magnitude, and not always in obvious ways.  This is a very large place that is very decentralized when it begins to make budget cuts, he said.  What we would like everyone to do is try and focus their resources so that students have a full program can graduate on time, and they are inconvenienced as little as possible.  The President said there will be inconvenience, but he did not think it would be fundamental and felt this was the best plan for minimum disruption.  This is my seventh significant cut in higher education, he said, and it does not get any easier or less painful.  But, things will really become disruptive if we string two or three of these cuts in a row.  It is always possible to get over one cut and try to regain.  But if two or three of them are strung together, next year we will be talking about fundamentally different strategies that hurt the character of the institution because then there will have to be layoffs and cuts in academic departments.  We are not at that point.  This is serious, President Peters said, but we will handle it with as little disruption as possible.

A $10 million cut is going to have its consequences, Chair Boey said, there is just no way around it.  But we are still trying to maintain quality.

I am really troubled by these increases, Trustee Skoien said, and it is difficult for me.  I spent the last 20 years sort of in your position, President Peters, defending and explaining budgets, and I know it is a difficult position to be in, because it is hard to explain and articulate what the impacts are.  But for an individual student it is a pretty significant burden, particularly for families that have multiple children in college.  These numbers start adding up and really hit in a significant way.  So, I am troubled asking these questions, because I have been in your position and I know how difficult it is to explain some of it.  I appreciate how forthcoming you have been and all the comments that have been made about your explanations and your interaction with faculty, staff and students and the Board of Trustees.  But it really is difficult, particularly when something is so far out of line with rates of inflation.  I have a couple of questions.  How much gross revenue does this increase yield for the university?  The increase itself would generate about $4.7 to $4.8 million, Dr. Williams said, a little over 50 percent of the problem the university is facing.  So, as the President indicated, it is going to require an across the campus effort to meet our target.  My experience in building so many budgets in the past has shown that the only rational assumption in building a budget is to assume that enrollment for next year will be the same as this year, President Peters said, and that is what this model is based on.  We are expecting some increase in our enrollment next year, based upon high school graduations.  But it is a very tenuous thing to plan for increased enrollment in the budget, so we are assuming stable enrollment.  If we have less, it affects the Income Fund.

Trustee Skoien also inquired what the impact on the university would be if the increase were less than this proposal.  We are at the line right now where we think we will not have to lay off staff or eliminate programs, President Peters said.  However, the most graphic way to illustrate that impact is every percent we would reduce the tuition would translate into a number of faculty and staff we would have to lay off.

I am also distressed by all these increases, Trustee Vella said, and have been reluctant to make these motions.  I am relieved that you are going to put a high priority on not cutting anything to do with academic or student affairs, and that is going to be very important.  We have a responsibility to the citizens of the state of Illinois and to everyone in the university community, and I have confidence that is what you are putting your highest priority on.

As a student, I can relate, Student Trustee Alaniz commented.  As a member of the Board, the responsible thing to do is to support this increase.  As a student, I do not want to part with the money.  However, the recent FY03 budget cuts are unfortunate.  But it is important that we find a way to make up for these cuts and not jeopardize our teaching or our quality of education, which are our number one priorities.  Though this increase is going to be painful for students and their parents, I think it is necessary, and I support the university on this recommendation.  Also, I support President Peters on this recommendation and all his efforts to continue to make NIU a great establishment for our students.  At a time like this, he said, we really appreciate your leadership, President Peters, so thank you.

I wish we were voting for a five percent decrease instead of the increase we are all talking about, Trustee Boey said.  On the other hand, we have to do something today, because chances are that we will get hit again next year.  If we do not have the foundation to sensibly deal with the next round, things will be extremely chaotic.  As I said, $125 is a lot of money when you do not have it.  On the other hand, it represents approximately one‑half of the deficit, which means that there is going to be an impact on the other half.  If we do not deal with it now, something drastic will have to happen.  So, having heard all aspects of it, the Chair said, I personally am torn by it, but in the end, it is all about the quality of the education to the students.  So, I certainly feel that we need to support this.

Chair Boey asked for a motion to approve the FY03 tuition recommendation.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 7.e. – Fiscal Year 2003 Athletic Sports Camp Housing and Meal Expenditure

The athletic sports camp housing and meal expenditure is an annual item normally done as a pass‑through of fees collected from the boys and girls who attend the sports camps held on campus during the summer months.  Again, Dr. Williams said, we are very pleased with the fact that the camps will be housed in our own facilities, therefore, these dollars will remain within the university.  Chair Boey asked for a motion to approve the FY03 athletic sports camp housing and meal expenditure request.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.f. – Fiscal Year 2003 Student Accident and Sickness Insurance Contract

As part of the fee increase for health insurance, Dr. Williams said, the Board not only must approve the actual fee but also must approve the contract.  So this is simply the approval of the health insurance contract, which is a part of the student fees discussed earlier in the meeting.  Chair Boey asked for a motion to approve the FY03 student accident and sickness insurance contract.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 7.g. – Fiscal Year 2003 Waste Management Contract

The waste management contract is an existing multiyear contract that is brought to the Board annually for approval.  Dr. Williams said that this is the fourth year of a five‑year contract, and the prices remain the same as the current fiscal year.  Chair Boey asked for a motion to approve the FY03 waste management contract.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.h. – International Programs Division Contract Renewal

The International Programs contract renewal is also a pass‑through where students from all over the country come through Northern Illinois University for exchange programs abroad, Dr. Williams explained.  We usually allow an authorization up to $3 million, which is funded by participant fees.  The programs are very good because of the work of Dr. Manfred Thullen, President Peters said.  The President then recognized International Programs Executive Director Manfred Thullen, who will be retiring at the end of the year.  The President thanked Dr. Thullen on behalf of the community for what he has done.  Chair Boey asked for a motion to endorse the International Programs Division contract renewal.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.i. – Barsema Hall Furniture, Fixtures and Equipment

This item asks approval for funding of furniture, fixtures and equipment for Barsema Hall.  In a quick update to the Committee, Dr. Williams reported, the construction is moving on time, and even more gratifying is the fact that we are well within the established budget.  Mr. Barsema is very pleased with the progress we have made and even more pleased that we were on time and well within budget.  This has been an excellent project.  At the next full Board meeting, Board members are going to have an opportunity to tour Barsema Hall and the convocation center.  This request is for authorization of $4.95 million for the furniture, fixtures and equipment for Barsema Hall.  A request has been included in the state budget for funding this need, Dr. Williams said, and we anticipate it being approved.  The university will utilize whatever fund sources are necessary to fill in any gaps if the state is short in their appropriation.  Chair Boey asked for a motion to endorse the budget for Barsema Hall furniture, fixtures and equipment.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 7.j. – Biological Sciences Research Project

This is another contract the Board must approve annually.  It is for renewal of a contract for a joint project in biological science research that Northern Illinois University is working on with Yale University.  I am pleased to say, Dr. Williams said, that when I look at the bottom line, and the dollar amount for this grant has increased.  Chair Boey asked for a motion to endorse the Biological Sciences Research project.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.k. – Easements Required by the DeKalb Sanitary District

Agenda Item 7.l. – Easement Required by NICOR

These items require Board approval of easements to various utilities regarding two of our main projects on campus, Dr. Williams said.  This project is part of the East Lagoon, which represents a great improvement for our campus and for the general community.  There is new lighting, new bridges and a new landscape.  It shows the efforts on the part of our staff to do the right thing for our campus and not allow uninformed public opinion to deter us.  This particular easement provides the DeKalb Sanitary District with the necessary authorization to provide utility services.  Our legal counsel, Mr. Norden Gilbert, was involved in establishing these legal descriptions and making sure that the easement grants are consistent with university and Board policy, Dr. Williams said.  The easement runs to the south of Lincoln Terrace and extends beyond that across Normal Road just in front of Faraday Hall.

With regard to the convocation center, Dr. Williams said, the easement we are referring to is to the west of the site.  This is necessary to connect to pipelines along Lincoln Highway and will extend north onto NIU property.  This will not only serve the convocation center but also will serve as an anchor for future utility uses for other facilities such as the Family Violence Center.

Chair Boey asked for a motion to endorse the easements required by the DeKalb Sanitary District and by NICOR.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 7.m. – Information Technology Services Computer Lab Upgrade

This request is for the purchase of 443 desktop computers.  We use these to upgrade our student laboratories, Dr. Williams said, and to provide upgrades for our staff and faculty.  We try to bundle the orders together as much as possible.  That is the reason for the size of this request.  Out of the total request, Barsema Hall will receive 233 of these computers.  That purchase was previously approved.  Chair Boey asked for a motion to endorse the Information Technology Services computer lab upgrade.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.n. – Swen Parson Hall – Remodeling of Bursar’s Office

Dr. Williams explained that this particular request is for remodeling to improve the Bursar’s Office services and to give privacy to students who currently have to stand in what is, basically, a hallway to conduct business.  This would turn the Bursar’s Office into a more private area for discussions of student payment problems, financial aid, etc.  Funding of this project is provided under the university’s internal capital repairs budget.  Chair Boey asked for a motion to approve the Swen Parson Bursar’s Office remodeling project.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 7.o. – West Campus Access Road

This road will provide general access to the West Campus.  This request here is really one‑half of what will eventually be a boulevard entrance to the West Campus, Dr. Williams said.  It will provide access to the Family Violence Center and will serve as a secondary exit for the convocation center.  Our projection is that the Family Violence Center will be completed in September.  Chair Boey asked for a motion to endorse the West Campus access road.  Trustee Vella so moved, seconded by Trustee Skoien. The motion was approved.

Agenda Item 7.p. – NIU Tax‑Deferred Compensation Plan Amendment

Because of a new federal act, the Economic Growth and Tax Relief Reconciliation Act of 2001, Dr. Williams said, new and exciting opportunities have been extended to NIU employees to allow some enhancement and maximum opportunity in the tax‑deferred compensation and retirement plans.  In particular, this opens the door for 457(b) plans; but basically, it offers another opportunity for faculty and staff to have dollars deducted from their pay that could go into a deferred compensation plan.  Up to this point, the maximum contribution to the 403(b) plan was about $10,000 to $12,000 a year.  This amendment gives employees even more opportunity for deferred compensation, allowing them to almost double their contributions.  This request also identifies specific companies that are currently dealing with the 403(b) plans here at Northern, he said, so we are just extending the authorization to enter into agreements for them to offer the 457(b) plan.  The Academic and Student Affairs Committee, chaired by Trustee Vella, held quite a discussion on this, Chair Boey said, and Steve Cunningham gave us quite a presentation.  The one immediate priority is to be sure that the constituency on campus is being informed thoroughly so that they know how to make their choices. Chair Boey asked for a motion to approve the NIU Tax‑Deferred Compensation Plan Amendment.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

UNIVERSITY REPORTS

Agenda Item 8.a. – Fiscal Year 2002 Budget Status Report

By now, Dr. Williams said, I am sure everyone understands what the university faced.  We have met the required reductions that came to us through the Governor’s Office, approximately $4.9 million.  We have done this under the President’s guidelines, and we were able to do it with little disruption of our academic programs.

I want to thank the campus community and Dr. Williams and his staff, President Peters said, because we were obviously in a rescission, and a one‑time cut is very different than building a permanent base reduction in 2003.  We were able to take about 54 percent of the midyear rescission from central resources as a result of a warm winter and some excess Income Funds from more students coming to campus than we had planned and budgeted.  But that is not available to us next year, he said.

Agenda Item 8.b. – Fiscal Year 2003 Budget Process Update

We have reviewed and analyzed the FY03 budget, Dr. Williams said, and people should have a pretty good perspective of what the numbers are and what the impact is.  I would like to thank my staff, particularly as the President has mentioned, who worked double and triple time going over scenarios and options to try to come up with something that would really work for our campus.  He recognized several members of his staff, including Abby Chemers, Dianna Strink, Dori Hooker and James Barr.  These are the people who work with me to make sure the numbers balance out, and I want to say to you, thank you very much for your efforts.

Agenda Item 8.c. – Engineering Building Remediation – Capital Project Update

As you will recall, Dr. Williams said, we had a major problem with the design of our clean room and other parts of the Engineering Building.  The roof leaked, was repaired and still leaked and so forth.  The state appropriated an additional $4.9 million to try to address these problems.  We still are not there.  I am now in the midst of receiving bids on the work, and there are challenges there, but I do want to say that the College of Engineering has worked very well with us.  We are also working with the Attorney General for the State of Illinois, and CDB – both their counsel and their staff.  We have all come together, including NIU’s counsel, to try to come up with solutions to this problem.  So that the Board is aware, legal action has been taken and suits have been filed by the Illinois Attorney General regarding this matter.  In this case, the Attorney General represents the CDB, because the CDB actually is the state agency with whom the contracts were signed.  So, that litigation is proceeding, and we are doing what we can to finish the project.

Agenda Item 8.d. – Periodic Summary Report of Transactions in Excess of $100,000

In accordance with Board Regulations, Dr. Williams said, any transaction between $100,000 and $250,000 can be approved by the President, but the President also reports those specific transactions to the Board.  This item lists the ten transactions conducted over this last quarter.

Agenda Item 8.e. – Periodic Report on Investments

Dr. Williams thanked Kathe Shinham and Tamara Farley, our investment officer, for a return of 5.3 to 5.4 percent on our investments.  For the record, he said, our investment strategies under state statute require that the university only invest in nonstock and types of investments that have no risk at all in terms of principle.  That is safe investing, but it also limits the return.  So, the creative part is to be able to maximize that return under the guidelines that are established, and due to these ladies’ superb efforts, we always receive the maximum return.  On behalf of this Committee, Chair Boey said, I too would like to thank Dr. Williams and his staff for all the hard work they have put into these very difficult times.

NEXT MEETING DATE

Chair Boey announced that the next meeting date would be communicated at a later date.

ADJOURNMENT

There being no Other Matters, Chair Boey adjourned the meeting without objection at 10:28 a.m.

Respectfully submitted,

Sharon M. Mimms