Minutes of the

BOARD OF TRUSTEES

OF NORTHERN ILLINOIS UNIVERSITY

March 19, 2003

The meeting was called to order by Chair Manuel Sanchez at approximately 10:12 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 Catherine Adduci, Robert Boey, Myron Siegel, Gary Skoien, Barbara Giorgi Vella, Student Trustee Jesse Perez and Chair Sanchez.  Not present was Trustee George Moser.  Also present were Board Parliamentarian Kenneth Davidson and President John Peters.  With a quorum present, the meeting proceeded.

Confirmation of Open Meetings Act public notice compliance was provided by Board Parliamentarian Ken Davidson.

After discussion with President Peters and a review of the printed Revised Agenda before us, Chair Sanchez said, I propose creation of a Consent Agenda that would immediately precede the beginning of the President's Report for today's meeting and move President's Report No. 34 Action Items 9.a.(3), (5), (6), (7), (8), (9), (11), (12), (14), (16), (17) and (18) and Information Items 9.b.(1), (2), (3), (5), (6), (7), (8) and (9) and 9.c.(1) be moved to a consent agenda.  Further, I propose we include in the Consent Agenda, all action items proposed through the Chair's Report, noting a substituted and revised page 74, for the second amendment of Section VII of the Board Regulations.  I also propose adding a resolution under the Chair's Report.    Trustee Skoien made a motion to approve the meeting agenda as amended.  Trustee Vella seconded the motion.  The motion was approved.

It was moved by Trustee Boey and seconded by Trustee Adduci to approve the minutes of the December 5, 2002 Board of Trustees Meeting.  The motion was approved.

Chair Sanchez welcomed everyone to the meeting.  It has been our practice at these meetings to begin with some remarks from the Chair on items coming before the Board.  This morning, he said, my remarks encompass many of those issues, but they also include some more personal observations.

I doubt that there has been a more somber moment in our country's history for some time than we have today, the Chair said.  We are less than 10 hours from a deadline that has been set by our country's President for a war that is inevitable and that will likely commence before the weekend is out.  We are at a time in our state where we have been exposed to budgetary constraints such as we have never before seen.  We have challenges that none of us could have anticipated would be taking place in the year 2003 on the heels of some incredibly exciting economic situations.  Now we have the opposite situation.  We have some incredibly difficult situations confronting us budgetarily. 

We Trustees are prepared to do what we need to do to deal with this somber moment, Chair Sanchez continued.  And we are confident that President Peters and his staff, the faculty and the students that make up this university will do what is necessary to deal with these incredible challenges that still lie ahead.  I do not know, when we return for our next Board Meeting, where we will be with some of the things like tuition, our own budget, our income fund and other matters that we need to deal with.  But I do know that you can count on a 24x7 approach from your Board of Trustees, the Chair said, in trying to do all we can to ensure that Northern Illinois University does not make any more sacrifices for our educational mission than are absolutely necessary.  Clearly, we are going to have to make some sacrifices; that is not an issue.  But we will try to minimize them to every extent possible.

As we sit here today, ladies and gentlemen, the Chair said, thousands of our countrymen and ‑women -- including some of our own students and staff -- have been called up to active military duty.  They are awaiting orders in what appears to be an inevitable armed conflict.  Putting aside whatever opinions we might hold about the politics surrounding the conflict, I know that all of us are earnestly longing for the safe return of our fellow citizens and a quick movement toward lasting peace.  On that note, my fellow Trustees and I ask for a respectful moment of silence for what we are about to undertake.  {Moment of silence.}  Thank you, very much.

Closer to home, we are fighting another battle that touches the lives of every member of the NIU community and service region, Chair Sanchez said.  I am referring, of course, to our struggle on the domestic budget front in Springfield.  President Peters is going to update us in more detail in a few minutes, but I would like to give a Trustee's perspective on what is happening.  Everyone has heard by now of the request from the Springfield Bureau of the Budget, on behalf of Governor Rod Blagojevich, for all public universities to set aside eight percent of their Fiscal 2003 budget "for review."   In other words, another rescission, and this one comes three-quarters of the way through our fiscal year. 

President Peters and others have worked diligently to explain the devastating impact that cut would have, Chair Sanchez went on to say, and much media attention has been paid to some of the more drastic scenarios the universities are predicting.  This threat is unmistakably real and immediate, and it will affect our ability to serve students.  But there are other threats on the horizon that do not necessarily come with a dollar sign attached.  These are the issues in which we Trustees have become directly involved in recent weeks.  In fact, one or more members of the Board have been present at every single major hearing on these topics over the past few months.  I am traveling back to Springfield tonight to testify early tomorrow morning.  We are all doing what we can, both as a Board and as individuals, to protect this university and to preserve the resources we need to educate our students and to serve our State.  In fact, I am particularly proud to report to you that our NIU student leaders, when they could have been in Florida or some other warm climate, spent their spring break in Springfield last week helping President Peters discuss their concerns over proposed cuts to the NIU budget with legislators.  They also asserted student dissatisfaction with the way in which the higher education budget is being handled.  That is the type of devoted and self-sacrificing students, faculty and staff we have here at NIU.  And it is one more reason I am so proud to be the Chair of this Board.

The particular issue I am testifying on tomorrow has to do with NIU's ability to keep the tuition monies it collects, Chair Sanchez said.  In university budgeting terms, tuition revenues are called the "Income Fund," and some government officials think we should not be able to control those funds.  They believe we should return to the practice of sending collected tuition -- tuition that we collect here in DeKalb for NIU students from NIU student parents or benefactors -- and that we should send that tuition to Springfield, and then wait to have it, contingently, reappropriated back to us.  It goes without saying that we oppose this impracticable and unjustifiable idea.  We believe that when parents or students write a check to NIU to help cover the cost of their college education, they have every right to expect that their money contemporaneously stays on that campus to support the courses and services for which they signed up.  The right to control our own earned tuition dollars is something we fought hard for in the first year of our existence as a governing Board of Trustees.  We argued then, and will steadfastly argue again, that local control of tuition dollars is the only practical tool we have to handle fluctuations in enrollment and to address emergency needs.

In 1991, the Chair said, when we had a large and somewhat unexpected increase in enrollment, we did not control our own tuition dollars.  The increased revenue the university received from those additional students did not come back to this campus for a full twelve months.  The effects were devastating to our students.  We were unable, due to lack of funds, to add the number of extra courses and hire the number of extra instructors needed to ensure that students could take all of the classes they needed to graduate in a timely fashion.  Some of you may have been students at that time or had students here just 11‑12 years ago when we experienced that difficult situation.  And you will recall the uproar that resonated from DeKalb County and throughout the whole state.  In the end, some students were caught in the pinch.  They had to take an extra semester or two to graduate, and, of course, that cost them and their parents more money.

If there is one thing NIU stands for, it is individual opportunity.  I have shared with you many times my own story, Chair Sanchez said, and I intend to share it again tomorrow in Springfield.  I was, like many of our students today, the first member of my family to attend college.  Getting my degree at NIU was the absolute key to my future success.  Like many of our students today, I would have been extremely hard pressed to find the money for an extra semester or two if I had not been able to get the classes I needed in four years to graduate.  So, as you can tell, it is a very personal issue to me, and others like me, and one that my colleagues and I are prepared to fight for. 

We need the flexibility to plan for these fluctuations in enrollment, he said, and we only have that flexibility if we can keep tuition dollars here.  Happily, we have the problem of increased enrollment.  Happily, our university is growing.  Happily, we are a university that is not looking at shrinkage or loss of students.  We are an exciting opportunity for students and we need to continue to grow and have the flexibility to service that growth.

Some of the other issues in the state capitol involve legislation that would limit our ability to respond to inflation and declining state support, would limit our power as an independent governing board to make decisions based on the unique needs of our students at NIU, and would truly take Illinois higher education back about three decades in terms of responsiveness to emerging needs in our state.

We know that Illinois is facing an unprecedented financial crisis, Chair Sanchez said.  We know that all state institutions have to contribute to the solution.  We are more than willing to do our part.  That is not, never has been and never will be an issue.  But what I will fight are attempts to use this very real, very difficult situation for any purpose that disadvantages our students.   We all believe in the principles of accessibility, affordability and accountability.  You heard that during the election campaign -- accessibility, accountability, affordability.  It was a mantra that we heard, and this governor was elected on that mantra.  We believe that NIU exemplifies those values. 

We are glad to talk about the ways to be even more efficient, and to provide services even more effectively for our students Chair Sanchez said.  But, I am disheartened by some of the broad‑brush, stereotype, headline‑grabbing comments we have heard that imply students somehow will not be hurt by continuing to cut our budgets and eliminating what little flexibility we have to meet these changing needs, as well as comments that imply that our necessary, proven, dedicated and continuously hard working staff are less than efficient or even superfluous.  All of the other nine higher education institutions are spending like there is no tomorrow, using charter flights, having dinners at fancy five‑star restaurants, etc.  NIU's Trustees have taken flights to Springfield, and we have paid for those flights individually.  We have driven, we have stayed in hotels.  We have paid for those hotels individually.  We are not looking for anything from the state.  But because there has been abuse by other universities, we are all being pilloried by the press and by this administration.  We need to emphasize, and we will, that when it comes to administrative bloat or administrative spending, of all of the universities, we are the most efficient.  When it comes to that kind of spending, we are thrilled to be at the bottom of the list.  In other words, Chair Sanchez said, we are the most efficient higher education university in the state of Illinois, and we are very proud of that.

Illinois has built a world-class public university system by establishing institutions with unique and differing missions to meet the diverse needs of the people of Illinois.  If we are to be scrutinized, the Chair said, let it be as individual institutions.  I am confident that this university, my alma mater, sets the best‑practice standards for effectiveness and accountability, and that is the message I am taking to Springfield tomorrow.

In our discussion of the Trustee's involvement in Springfield, Trustee Boey said, I could not help but remember that a few weeks back, all the Trustees visited Springfield and met with the various leaderships, including the Governor's Deputy.  And I remember that the one statement we all made to each of those leaders was, "If you are looking for a role model of efficiency and accountability among the state universities, look NIU's way."  I remember that, Chair Sanchez, and I hope they will remember it tomorrow when you speak on the income fund.

On behalf of all the students, faculty and staff, President Peters said, I want to thank Chair Sanchez and all the Trustees who have worked so hard and stood up for the university during this difficult time.  Thank you very much, Chair Sanchez said, and I will feel even more compelled knowing that the 25,000 students, the faculty and the administration I represent are behind us as a board and are behind us as the finest public higher education institution in this state.

The Chair welcomed UAC representatives Dr. Suzanne Willis, Dr. Paul Loubere, Dr. James Lockard,  Ms. Beverly Espe, and Ms. Sara Clayton.  I would like to add to President Peters' appreciation of your and the entire Board's support of us in these very difficult times, Dr. Willis said.  It is difficult to find something to be pleased about, but that is something that gives the faculty heart.  And it makes a big difference to us, even if it does not make a big difference in our budget.  It is hard to know what to worry about first.  I am personally touched by the national episodes.  I have a stepson who is in the Army Reserve, and a nephew who just joined the Army Rangers.  I have relatives in Israel.  And, if it goes on long enough, I have a 13‑year‑old son who could become involved.

Moving to local issues, she said, there are a couple of things I wanted to bring to your attention.  One is that there is a group called the Counsel of Illinois University Senates, which consists of the presidents of the faculty senates of the nine state public universities.  We are going to meet on Friday, so, if anyone has any suggestions for us, please let me know.

Understandably, the faculty are getting more and more nervous, particularly with this $8 million.  It is hard to imagine how we could possibly manage to deal with that.  But I think we certainly appreciate being informed all along as to what is going on.  And, to the largest extent possible, we would also like to be involved.  So, let us know what we have to work with, and we will tell you what we can do with it.

That is so typical of the family known as NIU, Chair Sanchez said.  Thank you, Dr. Willis.  We appreciate that and we will work with you as well as with our staff and our students to do whatever is necessary to deal with these hard times.

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 he had received one timely request to address this Board meeting and recommended that Mr. Jaime Borda be recognized for remarks not to exceed five minutes in duration.

I understand, Mr. Davidson, that you have provided Mr. Borda with the "Generally Acceptable Rules of Decorum for Public Presentations" publication.  Before we receive any presentation, I want to remind my fellow Trustees and members of the public who are present today that these presentations are mainly for providing special information to the Board concerning its pending business, and that the Chair will take under advisement follow-up actions, if any, that may be appropriate.  The Chair recognized Mr. Borda for a five‑minute presentation.

Mr. Borda thanked the Board for taking this time to hear and consider his case.  He stated that he was requesting intervention by the Board of Trustees in accordance with the NIU Constitution and Bylaws in Chapter 9 concerning his expulsion from the Theatre Department because he felt the faculty had restricted his academic freedom and denied him the chance to defend himself against charges.

Academic Affairs, Student Affairs and Personnel Committee

Committee Chair Vella reported that the Academic Affairs, Student Affairs and Personnel Committee met on March 4.  The following matters were brought before the Committee for endorsement or information.  Received for action were the recommendations for faculty and Supportive Professional Staff sabbatical leaves for the year 2003‑2004.  The Committee reiterated its support for the sabbatical programs as these programs contribute to the university's mission to transmit, expand and apply knowledge through teaching, research, and artistry and public service, Chair Vella said.  Other action items included a request for a new emphasis and a request to delete an emphasis and a minor.  None of these action items are expected to have a negative impact on the budget.  Information items brought before the Committee are an update on the status of NIU's reaccreditation by the Higher Learning Commission of the North Central Association, the annual report on Oral English Proficiency for the 2001‑2002 Academic Year, and the annual IBHE report on underrepresented groups for 2001‑2002.  Many of the items addressed by the Academic Affairs, Student Affairs and Personnel Committee are included in the President's Report for Board approval at today's meeting.

Finance, Facilities and Operations Committee

Committee Chair Boey reported that the Finance, Facilities and Operations Committee met on March 4, 2003.  At that meeting, the Committee considered and approved recommendations for fees and room and board rates for the upcoming academic year.  The recommendations were developed through a consultative process and are reflective of the budget reductions and challenges that the university faces in Fiscal Year 2003-04.  Additional items considered by the Committee were contracts and contract renewals for Student Accident and Sickness Insurance, Mass Transit, Illinois Mutual Aid Agreement, project approval for the Chessick Legal Skills Training Center, and various other items which are included on the Consent Agenda.  The Committee received the following reports:  Fiscal Year 2004 Budget Process Update, Academic Program Enhancement and Technology Surcharge, and other various periodic reports.  Many of the items addressed by the Finance, Facilities and Operations Committee are included in President Peter's Report for Board approval at today's meeting.

Legislation, Audit and External Affairs Committee

At the request of Chair Sanchez, Committee Chair Siegel reported, I attended and testified at the House Appropriation hearings in Springfield.  A week later, I attended the Senate Appropriation hearings to support the President and to testify on our behalf, if need be.  As previously noted, several of our student leaders were present and lobbying the legislature as well as being at the hearings to support us.  I have attended these hearings every year since the Board was formed.  I also attended NIU Day in Springfield and had a private lunch meeting with Dan LaVista, the Executive Director of the IBHE.  During my conversations with the legislators, they often ask me about our compliance audit, and I will report to you on our compliance audit results at the end of my report.

The LAEA Committee met on March 3 in Hoffman Estates.  Kathy Buettner provided an overview of new substantive legislation introduced in Springfield that affects public university operations.  She reported that over 5,500 bills had been filed since January 15 and NIU was actively tracking about 300 bills that could potentially affect some part of the university's operation.  You can find a partial list of substantive legislation pending in Springfield in the information section of your Board of Trustees agenda for today's meeting.

Kathy Buettner and President Peters then presented a detailed overview of the university's FY04 operating and capital budgets at the Board of Higher Education's recommended levels.  Due to the budget problems facing the state, and the new governor's transition, the Governor has received a delay from the General Assembly until April 9 for the presentation of his FY04 budget.

Planning funds for the Stevens Building renovation project are included in the IBHE recommended capital budget at $1.6 million, while construction funds are allocated at $15.8 million.  Unfortunately, they fall at a point on this $350 million capital budget list that make it unlikely that the projects will be funded.

Kathy concluded with a detailed report on the federal level, including an FY03 federal administration budget summary.  She also discussed the federal Transportation Reauthorization Act pending before Congress as well as the new changes required under the U.S. Patriot Act for immigration students here on various visas.  Reporting requirements have been significantly increased for our educational institution, and NIU is in compliance with the new federal requirements.

I want to take a moment to acknowledge Kathy's work, Trustee Siegel said.  She has been working very hard for NIU, and the results have been phenomenal.  I cannot imagine where NIU would be today had we not made the investment that we did in our own governmental affairs people.  Based on the returns that we have seen in grant dollars and the results we have achieved legislatively with this fiscal crisis, we would be well served to expand in this area.

I also want to thank Kathe Shinham for a fine presentation to our committee, Trustee Siegel said.  Kathe delivered a report to the Committee on the FY02 Compliance Audit, which contained three findings, one of which was a repeat finding involving the Foundation and Alumni Association's noncompliance in meeting the annual deadlines for the submission of GAP financial package.  Mallory repeated her pledge to this Board from last year that this finding will not occur again next year.  Mike Malone has also assured me that this audit finding will not repeat in our compliance audit next year.

At the request of Trustee Moser, Chief Donald Grady attended our meeting.  We had a presentation from the Chief on a variety of issues relating to security in Executive Session.  The Chief will be briefing the full Board in Executive Session today.

I want to end my report to the Board by addressing any reporters in the room.  There is a serious fiscal crisis in Springfield.  This crisis will undoubtedly impact the university's finances and, in turn, faculty, staff and students.  If you care about this school, if you care about your jobs -- and when I say jobs, in some cases it is our lives, our careers -- if you care about your classes as students, if you care about how much it costs you to go to school, you need to stand up and make a statement.  I encourage each and every student, and I encourage the local press to make this their mission:  to write the Governor and let him know that you are against any cuts to NIU's budget, that you are against the repeal of the income fund, and that you are against line item funding.  You should write, you should have your friends write, and you should have your relatives write.  Favorable results are directly proportional to the volume of contacts we make in Springfield.  I will be happy to provide suggested text to those who may want it.  Thousands and thousands of letters from higher education, faculty, staff and students, friends and family will make a difference.

Excellent report, Trustee Siegel, and I could not agree more with your suggestion, Chair Sanchez said.  And, I hope that people respond to Trustee Siegel's suggestion.  Before we move on to the next report, I would like to recognize the man who controls the security of our campus, Police Chief Grady.  Chief, keep up the good work, and thanks for being with us.

Illinois Board of Higher Education

Liaison Barbara Vella deferred the IBHE report to President Peters.  There have been two meetings of the IBHE since the last Board of Trustees meeting, President Peters said.  On February 4, at Northwestern University, the IBHE heard and accepted a report, which updated the board on actions to advance the quality and accountability goals of the Illinois Commitment.  The board accepted items on policies and procedures for the assessment of student learning and approved an item to have Illinois, the state, participate in the national forum on college level learning pilot projects sponsored by the Pugh Charitable Trust.  The IBHE took action to establish performance indicators to assess progress toward meeting the goals of the Illinois Commitment.  We heard a report on the Illinois Century Network.  And we heard a report on the impact of the elimination of the fifth year MAP program.  Also at that meeting, Kevin O'Kelly, who is NIU's new student representative to the IBHE, was introduced.  Kevin is also part of our student government.  He was one of the students, along with the president of our Student Association, Kevin Miller, who put their suits and ties on and went to Springfield instead of to Fort Lauderdale.  The student leaders were introduced by me at the Senate Appropriation hearing, President Peters said.  I think they were the only students down there, and students make a difference in this process.  Thank you for your leadership and your participation, because you get their attention more than any other members of our constituent group, the President told the two student leaders.

The IBHE called an extraordinary meeting this past month in Chicago and asked the university presidents to come before the IBHE to explain their responses to the Bureau of the Budget director's request that we reserve eight percent of this year's budget for possible review and return to the state.  At that hearing, the director of the budget also appeared to give his view of the situation.

Universities Civil Service Merit Board

Liaison Barbara Vella reported that the Universities Civil Service Merit Board met on January 29, and she participated by teleconference.  An election of officers was held, and a decision was made on a discharge proceeding for an employee of Southern Illinois University College of Medicine.  Our committee upheld the recommendation of the university on the discharge, she said.

Northern Illinois University Foundation

Liaison Bob Boey deferred to Mallory Simpson, President of the Foundation, for the Foundation report.  I reported to you in December that the fundamental work that needs to be done during this time when economic conditions provide some disincentive from major gift giving is the critical work of building relationships with the thousands of potential major donors which have been identified during the past two years.  I am pleased to say this work is progressing as well as it can, given the limited number of gift officers we have.  Each of the gift officers I introduced to you in December is really in the groove now.  They are hosting many potential major donors at university events and meeting with them individually.

Responses are quite mixed, Ms. Simpson reported.  Some of these are cold calls, and people choose not to return those calls or choose not to meet with staff.  But others are truly delighted to be hearing from their alma mater and are looking for ways to get reconnected.  We are taking good advantage of Alumni Association and athletic events so that we are collaborating and not duplicating efforts.  We send our gift officers to some of these events across the country, and they are able to make new connections among our major prospects.  I would like to share one quick story with you to try and put a little of the human face on it.  Through our Huskie Telefund, one of our student callers had a conversation with an individual in Indiana who was so impressed with the quality of that call that he got in touch with university staff and said he wanted to do something for this student.  So, John Bass got in touch with this individual and facilitated a dinner gift certificate for the student.  A very warm gesture.  That really was just the beginning.  Since then, this individual returned to the university campus with his wife, who is also an alumna, and his two children for the first time in 11 years.  They met with Dean Richmond and Dean Graf.  They met President Peters, Dr. Eddie Williams and Coach Rob Judson and had a tremendous experience.  This is the start of the kind of relationship that I am talking about.  On the flip side, some of the people who appear to have extraordinary potential to help the university are very hard to gain access to or to get them involved.

Although our gifts to date are tracking slightly ahead of our pace last year at this time, Ms. Simpson said, we expect to end the year several million dollars less, because last year included the final payment of the Barsema Hall pledge.  We have received nearly $3.7 million compared to $3.5 million last year.  On the annual fund front, we are up about six percent, despite the economic conditions, and I think this is a result of some of our direct mail initiatives and new strategies employed by our new team.  We have booked about $370,000 in new major gift commitments that do not show in our gift receipts because the pledges will be paid over time.  We are currently exploring donor interests in several exciting new university initiatives.  My practice has been not to report gifts and pledges to you until we either have the money in hand or we have a signed pledge document; but I can tell you that we have preliminary verbal commitments on several large gifts, she said, that we hope to be able to report later this spring.

Lastly, Foundation committees and the board as a whole are having meetings on Thursday and Friday, Ms. Simpson reported.  The executive committee meeting will be devoted to far reaching discussions of what the Foundation can do to increase its capacity to provide support to the university through development programs.  Last year, I reported that the Foundation board had approved a budget that essentially put into play all of its existing resources to support Foundation activities.  Now it seems necessary to develop strategies to significantly increase Foundation resources.  The Foundation board is also committed to finding new strategies and measures during these somber times.

It would be an understatement to tell you that we acknowledge how much more difficult and how much greater a challenge the Foundation has in these trying times, Chair Sanchez said.  With the economics and the war, it is a very difficult time.  And yet, somehow, some way, you and your team and Mike have continued to lead a very successful effort on behalf of NIU through its Foundation, and we look forward to continuing favorable reports about the success of your efforts.  Also, I look forward to hosting the second annual event there in Naperville so we can reengage some of those alums and some of those parents of NIU students.

Before we go into Executive Session, Chair Sanchez said, I want to acknowledge two things.  One is, if you did not see it, Bus Ed., the technology issue, has a fabulous article featuring none other than NIU's Barsema Hall.  This is a national publication that provides another example of the kind of national attention we have received thanks to Dennis and Stacey's gift and to the efforts of the Foundation.

Second, I wanted to acknowledge the tournament and NIU being part of this March madness.  I want to compliment Coach Judson and his staff and the players, Chair Sanchez said.  Even though we did not make it this year, nobody predicted we would have the kind of success that we did have.  Having been a first‑hand witness to many of those games, it was a proud moment for me to be sitting in that brand new, convocation center seeing the team run up and down the court with a fabulous coaching staff led by Coach Judson and wearing that badge of pride of the NIU Huskies.  So, my hat is off to the coaches and to the students for a good season, and we look forward to next season.  We have a very solid future ahead of us.  Our football, basketball and other sports programs are going to continue to have great successes because we have a great athletic director, we have great head coaches and we have a great team that compliments the educational achievements and efforts of this institution.

Last, but not least, Chair Sanchez said, we said when we interviewed, recruited and successfully brought President John Peters to this campus, that academics and athletics are not at opposite poles.  They can and do compliment each other, and I think we have had proof of that here for the last several years.

I just say that it is appropriate for all of the Trustees here to congratulate Dr. Peters on his appointment as the new chair of the MAC Council of Presidents, Trustee Boey said.  We are very proud of his being elected, and I am sure he will bring along with that many accolades to the NIU campus and to the Chicago area.

I did not seek that, President Peters commented.  And it is certainly more than I bargained for because it means getting involved in things like bowl contracts and ESPN contracts.  I did spend the end of last week at the Mid‑America Conference tournament, where we were the fourth seed, and we advanced the first round, which I do not think we have done in a long time.

I talked to many national sports people, ESPN, Fox Sports Net, the President said, people who all marvel at the progress NIU has made in athletics.  I want to work very hard to get more attention in the Chicago area for the MAC.  I have to say that our athletic administration, our athletic director and our coaches have done a remarkable job on very little, and they deserve our support.

Chair Sanchez asked for a motion to close the public meeting to conduct an executive session to discuss the following subjects authorized by the Illinois Open Meetings Act:  personnel matters as generally described under §2(c)(1) and (3) of the Open Meetings Act, litigation and risk management matters as generally described under §2(c)(11) and (12) of the Open Meetings Act, and Executive Session Minutes matters are generally described under §2(c)(21) of the Open Meetings Act.  Trustee Siegel so moved, seconded by Trustee Moser.  A roll call vote of the Trustees to recess to Executive Session was unanimous.

Chair Sanchez reconvened the public meeting of the Board of Trustees at approximately 11:37 a.m.

Chair Sanchez asked for a motion to approve the items placed on the consent agenda earlier in the meeting.  They include President's Report No. 34 Action Items 9.a.(3), (5), (6), (7), (8), (9), (11), (12), (14), (16), (17) and (18) and Information Items 9.b.(1), (2), (3), (5), (6), (7), (8) and (9) and 9.c.(1).  Trustee Siegel so moved, seconded by Trustee Skoien.  The motion was approved.

Thank you, Chair Sanchez, and thank you for your earlier remarks, President Peters said.  You certainly have captured both the frustration we are all feeling and the strong resolve.  We have to continue fighting for our university and for our students.  For the record, I would like to take just a few minutes to reflect on where we have been, where we are now and where we may be headed with respect to our budget.  Nearly a year and a half ago, we received our first official word from Springfield on what we now know is an unprecedented fiscal crisis.  We immediately established reserves and adopted a set of principles that still guide us, and I will enumerate them here, again:

     -   Do everything possible to avoid compromising the integrity of our academic programs.

     -   Do everything possible to avoid layoffs, furloughs and salary reductions.

     -   And absolutely no compromising the safety and well‑being of our students and faculty.

We have lived by those standards I enumerated, and they have served us well.

I would like to recognize Chief Grady, who is here today with some of his staff, the President said.  Safety is a great issue for us, and I want to thank you, Chief, for putting together post‑9/11 a very good strategic plan for our safety, especially as it looks like we are going to be going to Code Red momentarily. 

During the last fiscal year, FY02, we suffered a midyear rescission and the imposition of new healthcare premium responsibilities for a combined reduction of more than $4.8 million, the President said.  Worse, that cut was made permanent.  So we started FY03 with a reduced base budget, with unavoidable cost increases associated with utilities, liability insurance and so on.  And this year, as I warned last year, we saved no money on utilities.  We have been shoveling snow and keeping the boilers going.  We received no increase in state funding to cover any of those increases.

We started Fiscal Year 2003 with a total shortfall in the $10 million to $11 million range, the President reported.  We were unable to give generalized salary increases this fiscal year, but we are hopeful, but not sure, about salary increases, which is always my top priority, for 2004.  We have frozen all but the most essential hiring and may soon have to go to a complete freeze.  We have drastically curtailed equipment purchases.  And we have had to abandon all but the most critical emergency repairs and maintenance projects.  At the same time, we accepted 1,100 additional students last fall without a dollar of new state money.  And remember, for every dollar you lose in state revenue, it takes $3 of tuition to make up, and, of course, we would never ever do that.  Eleven hundred more students with 11 percent less funding.  We did so because NIU has historically been a university of opportunity.  Accessibility is not just a word here, Dr. Peters said.  It is a core value.  We believe it is what a public university is all about.  In this uncertain age, with more students and families wanting to stay in close contact, the NIU service region is where 80 percent of all Illinois high school students graduate every year.  That said, we must continue to monitor the balance between student numbers and available resources.  We have put into place the kind of enrollment controls that we have so that we are able to provide a program for the students we take.  Protecting the integrity of the academic program means making sure students can get the classes, professors and experiences they need to succeed.

As this fiscal year progressed, President Peters said, we took more steps to cut costs and set aside more money for potential future cuts.  In fact, we set aside in the range of two to three percent at the beginning of the year as a contingency.  We have held that for potential cuts.  We participated in a study of administrative costs that will be made public next week.  We have not seen and likely will not see those results ahead of time.  One study reported that NIU was the leanest in the state.  I have no idea what this study will say.  It is difficult to know how to prepare for those recommendations knowing nothing about them or the methodology used to arrive at them.  But nothing could have prepared us for the request two weeks ago that we put $8.6 million in reserve for "review" by the Bureau of the Budget for this fiscal year.  At this point in the fiscal year, that amount is half of what we have left to pay bills in March, April, May and June.  That is half the amount of unobligated money that is left.  So, nothing would get done.  Not to mention the fact that more than 90 percent of that amount is already obligated in contracts or in personnel.  A rational response to that request continues to elude me.  We suggested a two percent reserve.  And, as you know, we were told that would not suffice.  Dr. Williams and Kathy Buettner have left for Springfield to be in a meeting this afternoon with the director of the Bureau of the Budget and all other university CFO's and government relations people.

At this point, all our negotiations are focused on saving as much as we can out of our current fiscal year budget, the President said, and you know that has hurt everyone.  Negotiations for FY04 have not even begun yet, but I think it would be safe to say that we are seeing a pattern here.  Chair Sanchez made a very important point in his remarks.  We must continue to insist that NIU be evaluated individually and on its own merits.  An independent study conducted last year and being used by the Governorˇ®s staff shows that NIU has the lowest administrative costs of any public university in Illinois.  And, according to some definitions we understand were used in this methodology, we have heard custodians and grounds people are considered pure administration.  I was not surprised by those figures.  As I have said many times in the two and a half years I have been here, I am very impressed by the leanness, efficiency and student centeredness of the campus community.  Nearly 90 percent of our operating budget is in personnel and contractual services.  Of that amount, more than 70 percent is in the academic and direct student support areas.  The remaining 30 percent do their best to keep our physical plant running, pay our bills and provide a host of services that contribute to the overall NIU student experience.

At NIU, we value our employees.  Up to this point, we have done everything we can to avoid layoffs and other drastic personnel actions.  But, I feel compelled to say that I am no longer certain we can avoid those actions.  This year we have eliminated more than a hundred positions, and they were all due mostly to attrition.  Given what we have learned in the past two weeks, it seems likely that we will lose more jobs.  And while we do our best to look at open positions rather than existing employees, I no longer feel confident that we will be able to find all the rescission dollars we need or the base cut dollars in 2004 to stop those reductions in force.

In the context of a real and devastating state budget deficit, which will take the collective talents of all of our government leaders to resolve, and in the context of a fiscal disaster that we know will require sacrifice on our part, against a backdrop of economic national recession and this looming war with Iraq, President Peters concluded, we must continue to advocate for higher education.  It is still, as our Chair so eloquently stated, the key to success in our modern world and the key to peace and justice in the world.  We can, we have and we will continue to tell our story.  We are very fortunate to have such leadership in that effort from our Trustees.  And we will be asking you for sacrifices.  But we know we will get through this.  I thank all of you for your advocacy on behalf of our students.

University Recommendations Forwarded by the Board committees

Agenda Item 9.a.(1) -- Fiscal Year 2004 Student Fee Recommendations

It is time again to approve student fee recommendations, President Peters said, and I direct your attention to item 9.a.(1).  Basically, we have this elaborate process that involves students at subcommittee levels that begins in November and works its way up to me in February.  This year, we are proposing very minimal increases through that process.  The overall increase is about 6.58 percent.  That, in large part, is driven by a contractual obligation of an increase of 17.31 percent in the student health insurance contract, which is something we have to negotiate.  That sounds like a high rate, but, in fact, it is not a bad rate, relatively speaking.  If you exclude that, the proposed fee increase for this year is 2.62 percent.

It is important to point out a couple of things, Student Trustee Perez said.  Although the fee increase translates to approximately $52 a semester, $32 of that increase is just for health insurance.  Because our insurance carrier has raised the rates, the price of health services has increased.  Please note that if students already have comparable health insurance or have less than a full‑time load, this fee is optional.  Aside from the $32, the remaining $20 will go to maintain the quality of service and facilities for these services on our campus.  I would like to thank the students who served on each of the committees that worked with President Peters and Dr. Williams in developing the most cost effective plan possible, he said.

As you know, Trustee Boey said, I am from private business, and in the last three years my company's own health insurance premium accrued to 100 percent.  You might have noticed my reaction when President Peters said 17 percent, Chair Sanchez said, because I thought in a similar vein.  Compared to the increases our businesses have experienced, that is quite reasonable.  Not that anybody wants to see any increases, but on the healthcare side, increases have been a universal issue, and there is no getting around it.

Before we take the vote on this, the Chair said, the fact of the matter is whether we are talking about student fees, room and board or tuition, there is nothing more sensitive to this Board of Trustees than those issues.  So, we very closely scrutinize every increase to see that it is minimized to the extent possible.  Chair Sanchez asked for a motion to approve the FY04 Student Fee Recommendations.  Trustee Boey so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 9.a.(2) -- Fiscal Year 2004 Room and Board Rate Recommendations

Agenda Item 9.a.(2) is the university's room and board rate recommendations for this year, President Peters said.  The rates are arrayed by type of facility on page 19 of your reports.  When you consider the fact that we are not asking for any increase in the meal plans, the average rate of increase is four percent.  This increase excludes any salary increases.  Some of our facilities are in need of repair and maintenance, and energy is up.  So, there is nothing new programmatically, it is just the cost of doing business here.  Chair Sanchez asked for a motion to approve the FY04 Room and Board Rate Recommendations.  Trustee Vella so moved, seconded by Trustee Skoien.  The motion was approved.

Agenda Item 9.a.(3) -- Fiscal Year 2004 Athletic Sports Camp Housing and Meal Expenditure

Agenda Item 9.a.(5) -- Fiscal Year 2004 Document Services Copier and Controller System Contract Renewal

Agenda Item 9.a.(6) -- Fiscal Year 2004 Waste Management Contract Renewal

Agenda Item 9.a.(7) -- Fiscal Year 2004 Northern Star Contract Renewal

Agenda Item 9.a.(8) -- International Programs Division Contracts Renewal

Agenda Item 9.a.(9) -- College of Education -- Literacy Education - Multiyear Contract

Consent Agenda Items.

Agenda Item 9.a.(10) -- Mass Transit Contract

As you know, the President said, our bus service, which is student operated, has the second largest ridership of a bus service in the state of Illinois outside of the CTA.  There was no increase in the bus fee, but now we have to request approval to expend approximately $2.425 million for this contract with ACT VanCom.  Chair Sanchez asked for a motion to approve the mass transit contract renewal.  Trustee Skoien so moved, seconded by Trustee Vella.  The motion was approved.

Agenda Item 9.a.(13) -- Illinois Mutual Aid Agreement

President Peters stated that the university requests permission to enter into multiyear intergovernmental agreements to provide mutual assistance and cooperation between the NIU Office of Public Safety and various state, county and local law enforcement agencies.  These are standard agreements that require approval every year.  Chair Sanchez asked for a motion to approve the Illinois Mutual Aid agreement.  Trustee Skoien so moved, seconded by Trustee Boey.  The motion was approved.

Agenda Item 9.a.(15) -- Swen Parson Hall -- Chessick Legal Skills Training Center

We seek Board of Trustees permission to establish a budget to remodel Swen Parson Hall, the President said.  We have received a wonderful gift of a quarter million dollars form Ken Chessick.  And we have added some university money to that to create two wonderful technology rooms -- one will be an electronic courtroom, the other will be a smart classroom to train lawyers in the use of electronic technology.

For those of you who do not know Ken Chessick, theChair said, he is a Law School alumni and a very successful attorney/doctor.  There are not many that I have met in the last 28 years, but he is one of them.  He holds a J.D. and an M.D.  He practices in the northwestern suburbs and is very fond of NIU.